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CZ Pleads Guilty. Fined $4.3 Billion in DOJ Settlement

Crypto | Nov 23, 2023

Changpeng Zhao, Binance CEO steps down following $4.3 billion settlement with U.S. regulatory agencies.

  • Changpeng Zhao (CZ), the CEO of Binance, has stepped down and pleaded guilty (federal court in Seattle) to breaking U.S. anti-money laundering laws as part of a $4.3 billion settlement resolving a years-long probe into the world's largest crypto exchange.
  • Binance broke U.S. anti-money laundering and sanctions laws and failed to report over 100,000 suspicious transactions, including those linked to terrorist groups and illegal activities.
  • The settlement includes a $3.4 billion penalty to the Financial Crimes Enforcement Network (FinCEN) and $968 million to the Office of Foreign Assets Control (OFAC), along with compliance requirements and monitoring for five years.

See:  SEC Files Charges Against Binance for Mishandling Funds and Deceiving Regulators

  • Reuters reported the settlement includes a $1.81 billion payment within 15 months and a further $2.51 billion forfeiture.
  • Zhao will personally pay $50 million as part of the settlement, which is described as one of the largest corporate penalties in U.S. history.
  • Per Coindesk and details in a legal document, he is arranging a $15 million deposit in a trust managed by Davis Wright Tremaine, distinct from the bond amount. This is to ensure compliance with the conditions of his release, with an agreement to surrender these funds in case of any violation.
  • Additionally, he is securing the backing of two guarantors, who are committing $250,000 and $100,000 each.

 

"These resolutions acknowledge our company’s responsibility for historical, criminal compliance violations, and allow our company to turn the page" -- Binance statement

What's Next?

  • The date for his sentencing has been set for February 23, 2024, at 9 a.m. Pacific Time.
  • Zhao will remain the majority shareholder of Binance and will serve as a consultant on historical areas of the business.
  • Richard Teng will succeed him as CEO.

See:  SEC Files Lawsuit and Accuses Kraken of Commingling

  • The case against Zhao and Binance highlights the increasing regulatory scrutiny on cryptocurrency exchanges globally.  The settlement is seen as a significant step towards greater compliance and regulatory oversight in the crypto industry.

NCFA Jan 2018 resize - CZ Pleads Guilty. Fined $4.3 Billion in DOJ SettlementThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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