A federal judge accepted a guilty plea from cryptocurrency exchange Binance. The firm must pay a record $4.3 billion in fines and penalties to settle its case, the largest assessment ever in federal financial prosecutions.
According to a Reuters report, Federal Judge Richard Jones approved the deal late Friday. The agreement includes a criminal fine of $1.8 million that Binance must pay. It also requires the company to forfeit $2.5 million as a financial penalty for failing to perform required due diligence in delivering its services.
“Due in part to Binance’s failure to implement an effective AML program, illicit actors used Binance’s exchange in various ways, including operating mixing services that obfuscated the source and ownership of cryptocurrency,” U.S. Department of Justice prosecutors said in court documents. “They were transacting illicit proceeds from ransomware variants, moving proceeds of darknet market transactions, exchange hacks, and various internet-related scams,” the prosecutors explained.
Moreover, prosecutors said the $4.3 billion penalty imposed on Binance is the largest ever for a money services business in the history of the U.S. Justice Department. “It is one commensurate with the severity of Binance’s criminal conduct,” they said.
“Binance committed serious crimes in a deliberate scheme to grow as quickly as possible—a significant sentence is warranted for these violations,” the prosecutors further explained. “The proposed sentence is appropriate, holds Binance accountable for its criminal acts, and provides necessary deterrence to other criminal actors.”
Finance Giant Binance Seals $4.3 Billion Settlement
The eye-popping $4.3 billion figure was first floated in November during the company’s early negotiations with federal prosecutors. Judge Richard A officially sealed the final deal, settling the claims on Friday. Jones of the United States District Court for the Western District of Washington at Seattle.
Furthermore, with the company’s claims now settled, it remains an open question what will become of its founder, Changpeng “C.Z.” Zhao. Currently out on a $175 million bond, Zhao’s sentencing on money laundering sanctions violations charges brought by the U.S. The Department of Justice postponed until April 30. Zhao awaits sentencing and is banned from all future involvement in Binance-related business operations.
Prosecutors now want Zhao to surrender his Canadian passport and provide at least three days’ notice before any travel, CNBC reported today. Along with admitting guilt and agreeing to pay the hefty penalty, court documents said Binance has agreed to cooperate with the government, enhance its compliance program, and adopt an independent compliance monitor.
Moreover, Binance has been paying its way out of mounting legal trouble. In December, the U.S. District Court for the Northern District of Illinois approved a separate $2.7 billion settlement between Binance and the U.S. Commodity Futures Trading Commission (CFTC). Zhao had to pay $150 million out of pocket for violating the Commodity Exchange Act and CFTC regulations.
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