Binance’s CEO has pleaded guilty to AML violations as part of the settlement between the US agencies and the exchange. On Tuesday, Changpeng Zhao, aka CZ, announced his resignation in a long and emotional post on Twitter, handing over the helm to Richart Teng. “I made mistakes and I must take responsibility,” he wrote. Concluding his tweet, he also “proudly” pointed out that the US agencies didn’t accuse Binance of user fund misappropriation or market manipulation.
In his announcement, CZ skipped the fact that he pleaded guilty to anti-money laundering, unlicensed money transmitting, and sanctions violations, agreeing to pay a criminal fine of $50 million and additional $150 million in civil penalties.
Binance took a much harder hit. To resolve the charges, the company agreed to pay over $4.3 billion in fines and other penalties – a record amount in the history of the Treasury Department. Treasury Secretary Janet Yellen declared Binance was guilty of “consistent and egregious violations of U.S. anti-money laundering and sanctions laws.”
“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed — now it is paying one of the largest corporate penalties in US history,” Attorney General Merrick B. Garland commented in the press release available on the Department of Justice website.
He stressed that Binance employees were perfectly aware that the exchange was serving thousands of users in sanctioned countries and consciously violated US law by facilitating transactions between users in the US and those in sanctioned countries.
The conclusions come after several years-long investigation allowing authorities to allege that Binance contributed to enabling everything from drug trafficking and child abuse to terrorist financing by turning a blind eye to illegal activities on its platform. According to US officials, the world’s biggest exchange allowed over 100,000 transactions related to illegal activities and more than 1.5 million cryptocurrency trades violating US sanctions.
After pleading guilty, CZ faces up to ten years behind bars, although his sentence is likely to be as low as 18 months.
