Binance to pay a fine in the US, as its CEO Changpeng Zhao steps down
Binance has been ordered by US authorities to pay $4.3 billion for violations related to anti-money laundering rules, the bank secrecy act, US sanctions, and other offenсes. Changpeng Zhao will step down as the head of the exchange and pay a $50 million fine. Richard Teng, formerly responsible for regional markets, will take his position.
The investigation into Zhao’s case is ongoing, and he could face up to 10 years in prison. But some experts suggest that a potential term of imprisonment may be no more than 18 months.
The company admitted its inability to prevent its platform from being used for transferring funds to Hamas terrorists. Additionally, Binance made over 1.1 million transactions, amounting to more than $890 million, between clients from Iran and the United States.
US Attorney General Merrick Garland pointed out that Binance’s growth as the largest crypto exchange was partly attributed to these illicit activities.
Secretary of the Treasury of the United States Janet Yellen expressed regret over Binance neglecting its legal obligations, leading to the exchange being used by cybercriminals and terrorists for financial transactions.
Vladimir Smerkis, the former Binance General Manager for CIS, views recent developments as a positive occurrence for the crypto industry. He emphasised that Binance’s substantial market control makes it a significant player, and any pressure on such a major entity has affected the entire sphere. Despite the considerable size of the fine, Smerkis believes it won’t pose severe challenges for the company.
The agreement reached with the Department of Justice will allow Binance to continue operations in the United States, with Changpeng Zhao maintaining a control stock. However, the exchange is still anticipating two additional lawsuits, including one from the Securities and Exchange Commission, which alleges violations of securities trading rules.
As for Changpeng Zhao, the verdict in the money laundering case will be announced later. While he has been released on a $175 million bail and can leave the United States, he is obligated to appear in the US court two weeks before the final judgement is announced.