Binance Holdings Limited, the company that operates Binance.com, pleaded guilty to multiple violations of the Bank Secrecy Act and agreed to pay a total of $4.3 billion in penalties. The settlement is to resolve ongoing investigations regarding allegations Binance failed to register as a money transmitting business and for violations of the Bank Secrecy Act and International Emergency Economic Powers Act.

Binance’s chief executive officer and founder Changpeng Zhao plead guilty to failing to prevent money-laundering through effective anti-money laundering programs.  Zhao has resigned as the CEO of Binance, and later announced his resignation from the board of Binance.US.

$4.3 Billion Settlement 

In securing the settlement, Binance has agreed to the following: 

• Binance agreed to forfeit $2,510,650,588 to the United States Treasury, based on the total of two figures: 
• $1,612,031,763 that Binance admits it collected for United States users which it agreed to pay within 6 months of sentencing. 
• $898,618,825 that Binance admits is transactions and proceeds from transactions between U.S. persons and persons who resided in Iran which Binance agreed to pay within 30 days of sentencing. 
• Binance will pay a criminal fine of $1,805,475,575. The fine is due within 15 months of Binance’s sentencing. 
• The total settlement is over $4.3 Billion. 
• Binance has agreed to conditions including independent review of their anti-money laundering programs 
• CEO Zhao pled guilty to violations of the Bank Secrecy Act, specifically Sections 5318(h), 5322(b), 5322(c), and 5322(e) of Title 31 and Title 18, Section 2. 
• CEO Zhao agreed to individual penalties of $50 million. 
• Binance pleads guilty to violating the Bank Secrecy Act, including allegations of knowing and willfully causing exportation, sale, supply of services to Iran without first obtaining required authorization or license from the U.S. Treasury’s Foreign Asset Control. 
• Binance agrees to not make any public statement, or statements in litigation, that contradicts their acceptance of responsibility of the guilty pleas. 

Attorney General Merrick B. Garland on the settlement: 

“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. In just the past month, the Justice Department has successfully prosecuted the CEOs of two of the world’s largest cryptocurrency exchanges in two separate criminal cases.  The message here should be clear: using new technology to break the law does not make you a disruptor, it makes you a criminal.” 

Allegations of Money Laundering, Illegal Transactions for Cybercrime and Terrorism 

Secretary Janet Yellen stated in the Department of Justice press release: 

”Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform. Today’s historic penalties and monitorship to ensure compliance with U.S. law and regulations mark a milestone for the virtual currency industry. Any institution, wherever located, that wants to reap the benefits of the U.S. financial system must also play by the rules that keep us all safe from terrorists, foreign adversaries, and crime or face the consequences.” 

Binance has agreed to plead guilty to allegations of failing to stop money-laundering, and agreed it would not publicly state otherwise against its guilt and responsibility.   

Cryptocurrency Litigation and Settlements 

The Binance settlement is one of several major news events in recent months.  The government recently prosecuted and secured guilty verdicts against the former founder of now defunct FTX, Sam Bankman-Fried. Sam Bankman-Fried is set to be sentenced in March of 2024, and faces sentencing on multiple felonies carrying 5 to 20 years of prison. 

The Department of Justice regularly publishes press releases regarding other cryptocurrency litigation or investigations, including a press release earlier this month noting they had successfully extradited a Serbian man to face existing charges regarding allegations of defrauding investors of over $70 million through the creation of fraudulent crypto and binary options platforms. 

Crypto Scam Law Firm 

Schneider Wallace continues to monitor this industry, as well as represent classes of investors and users harmed by cryptocurrency fraud or manipulation.  If you wish to discuss a cryptocurrency loss after manipulation or fraud, please contact our attorneys at 1-800-689-0024 or info@schneiderwallace.com.