April 22, 2024
Money

Judge Approves Binance’s $4.3 Billion Settlement For Anti-Money Laundering, Sanctions Violations


Topline

A federal judge approved a plea deal by Binance on Friday, requiring the beleaguered cryptocurrency exchange to pay more than $4.3 billion in fines and restitution, after the company and its founder Changpeng Zhao pleaded guilty late last year to breaking anti-money laundering laws and violating sanctions.

Key Facts

U.S. District Judge Richard Jones approved Binance’s plea deal during a hearing Friday, requiring Binance to pay just over $1.8 billion in fines and forfeit property totaling $2.5 billion, according to the company.

As part of the agreement, Binance’s compliance will be monitored by an independent firm for up to five years, in addition to the company agreeing to a review of its ethics programs, policies, procedures and systems.

A Binance spokesperson told Forbes the company “accepts responsibility” for its actions, adding it has “already made significant progress in taking the steps required” by the plea agreement.

Big Number

$898 million. That’s how much Binance is required to pay within 30 days, according to the plea agreement. Binance will be required to pay the full $1.8 billion in fines in “no later than” 15 months.

What To Watch For

Zhao—released on a $175 million bond—will be sentenced on April 30, after the hearing was originally scheduled for Feb. 23, according to court documents. He faces up to 18 months in prison, though prosecutors have requested a significantly longer penalty, according to the New York Times. Zhao agreed to step down as chief executive and pay a $50 million fine as part of the plea deal.

Key Background

Binance and Zhao admitted to violating anti-money laundering laws, as well as to unlicensed money transmitting and sanctions violations in a plea agreement with the Justice Department in November. The plea settled charges brought forward by agencies within the Treasury Department and the U.S. Commodity Futures Trading Commission. Treasury Secretary Janet Yellen said Binance had “turned a blind eye to its legal obligations in the pursuit of profit” and failed to prevent suspicious transactions among groups like Hamas, the Palestinian Islamic Jihad and Al Qaeda. Prosecutors argued Binance and Zhang “knowingly failed” to register as a money services business and “willfully” failed to implement an effective anti-money laundering program to “profit from the U.S. market without complying with U.S. law.”

Further Reading

Binance CEO CZ Steps Down As Part Of $4 Billion Settlement With U.S. (Forbes)

Justice Department Cites Hamas’ Use Of Binance In $4.3 Billion Settlement (Forbes)

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