In the last month, the Justice Department has taken down two of the world’s largest cryptocurrency exchanges’ leaders: Sam Bankman-Fried and Changpeng Zhao. As the DOJ has dunks on these crypto titans, the public opinion (and future) of the industry seems rocky.
Two weeks ago, FTX co-founder Sam Bankman-Fried was convicted of fraud, conspiracy and money laundering. Then this Tuesday, Binance and its founder, Changpeng Zhao, pleaded guilty to violating criminal anti-money-laundering guidelines. This charge comes with a $4.3 billion price tag—one of the biggest fines levied against a corporation. Attorney General Merrick Garland stated that “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 U.S. history.”
Binance Holdings Limited operates the world's largest cryptocurrency exchange, Binance.com. The company has pleaded guilty and agreed to pay over $4 billion to resolve the U.S. Justice Department's investigation. The charges include violations related to the Bank Secrecy Act, failure to register as a money transmitting business, and breaches of the International Emergency Economic Powers Act. And accordingly to the Treasury Department, Binance also “willfully failed to report” over 100,000 “suspicious transactions” from a host of sanctioned entities such as Hamas and North Korea**.** On top of also pleading guilty, Zhao has resigned from the role of CEO.
The guilty plea is part of coordinated resolutions with various regulatory bodies, marking one of the largest corporate penalties in U.S. history. The DOJ emphasized that Binance prioritized growth and profits over compliance with U.S. law, and allowed illegal transactions, including those involving terrorists, cybercriminals, and child abusers, through its platform. The resolution includes significant financial penalties, the forfeiture of over $2.5 billion, a criminal fine of $1.8 billion, and the appointment of an independent compliance monitor for three years. Zhao acknowledged understanding Binance's service to U.S. users, its growth dependence on them, and knowingly neglecting compliance with U.S. law.
The Verdict:
If you’re planning to be a crypto titan, learn from the falls of FTX and Binance. Don’t prioritize growth over legal obligations, launder money, or fail to report suspicious transactions—unless you have $4 billion to spare. Binance is paying one of the biggest corporate penalties ever for violating criminal anti-money-laundering guidelines, and its CEO Changpeng Zhao is in no better shape.
