- Binance has reached an agreement with FinCEN, OFAC, and CFTC. It will credit $1.8 billion to them and forfeit an additional $2.51 billion.
- Changpeng Zhao “CZ” consents to resign with a guilty plea.
- CZ will still retain the bulk of Binance’s ownership. CZ’s plea agreement may protect the company’s capacity to operate. CZ won’t be able to run Binance directly for 3 years. Might face up to 18 months imprisonment.
As part of a $4.3 billion deal with the government, Binance’s founder and CEO, Changpeng “CZ” Zhao, agreed to resign after the company was charged with criminal charges in the United States today.
In order to resolve violations of anti-money laundering and sanctions, the US Department of Justice said today that Binance will leave the US market and pay a punishment of $4.3 billion, one of the highest fines for a firm in US history. Binance faced accusations of not adhering to anti-money laundering regulations and permitting users in the United States to breach sanctions. This fine represents the biggest one a crypto exchange has ever faced.
A multi-year criminal probe of the corporation and its leadership led to the exit and penalties. In addition, CEO Changpeng Zhao resigned following his guilty plea to charges of violating anti-money laundering laws and his consent to pay a separate fine of $50 million.
According to the provisions of the plea deal, Zhao is prohibited from working for the corporation in the present or the future for a minimum of three years by the settlement agreement. According to the DOJ, Binance’s resolution tries to make it clear that cryptocurrency exchanges that cater to US consumers have to abide by the law.
Zhao will not be able to have an executive position at Binance, but the agreement permits him to keep the bulk of the company’s shares. Officials from the Justice Department stated that he is not permitted to rejoin the business. The maximum term that Zhao might receive in prison under federal sentencing guidelines is eighteen months. Later on, he will be sentenced.
“The fundamentals of our business are VERY strong,” the recently appointed CEO, Richard Teng, reassured investors.
But panic-stricken users are busy withdrawing funds from Binance. After the DOJ ruling, Binance users have withdrawn over $1 billion dollars from the crypto exchange.
However, it appears that Binance is doing well. The exchange alone is holding crypto assets worth $65 billion, according to its most recent “proof of reserves” report—a voluntarily issued attestation of an exchange’s holdings. DefiLlama currently values it at $68.4 billion.
Binance seems to have got off lightly in a lot of respects. It must pay a hefty fine, but it appears that the exchange has enough cash on hand to get by. Binance will also have to provide compliance reports to the US authorities and designate an impartial watchdog.
Zhao may now finally breathe after leading a largely nomadic life since his exchange was expelled from China in 2017, the same year it was created.
Disclaimer: This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
