Authorities with the United States Department of Justice disclosed a $4.3 billion settlement with Binance, accompanied by a plea deal with CEO Changpend “C.Z.” Zhao. Officials announced that the CEO will plead guilty to one felony charge as part of a settlement over criminal and civil cases with the exchange.
Attorney General Merrick Garland revealed in a November 21 press conference that C.Z. agreed to take his plea in person in U.S. federal court despite residing outside the country. He added that the settlement covers “civil regulatory enforcement actions” from various government departments, including the U.S. Treasury and Commodity Futures Trading Commission (CFTC).
Garland accused Binance of allowing criminals to transfer “stolen funds” using its platform and claimed the exchange feigned compliance with U.S. federal laws by providing paths for certain users to access Binance despite their ties to illegal funds. The settlement imposes monitoring and reporting requirements and mandates filing suspicious activity reports for past transactions.
“Binance prioritised its profits over the safety of the American people,” said Garland. “Using new technology to break the law does not make you a disruptor – it makes you a criminal.”
Treasury Secretary Janet Yellen specified that Binance would pay over $3.4 billion in penalties to the Finance Crimes Enforcement Network and around $1 billion to the Treasury’s Office of Foreign Assets Control. CFTC Chair Rostin Behnam detailed the payment of $2.7 billion in civil monetary penalties and disgorgement by Binance, with C.Z. contributing $150 million and former compliance chief Samuel Lin paying $1.5 million. The Justice Department will credit roughly $1.8 billion toward the latter resolutions.
Binance expressed that it was “pleased” to have reached the resolution with U.S. authorities, claiming the exchange “never faltered in upholding [its] core values of user security and safety.”
We’re pleased to share we’ve reached resolution with several US agencies related to their investigations.
This allows us to turn the page on a challenging yet transformative chapter of learning that has helped us become stronger, safer, and an even more secure platform.
— Binance (@binance) November 21, 2023
C.Z. announced his resignation as CEO, with Richard Teng taking over the role. In a statement, C.Z. admitted mistakes and underscored the resolution’s benefit for the community, Binance, and himself.
“I made mistakes, and I must take responsibility,” said C.Z. “This is best for our community, for Binance, and for myself. […] I have not had a single day of real (phone off) break for the last 6 and half years.”
C.Z. also emphasised that the allegations did not include misappropriation of user funds or market manipulation. The indictment against C.Z., filed under seal on November 14 to 21, cited one charge for failure to maintain an effective Anti-Money Laundering programme at Binance, violating the Bank Secrecy Act.
The settlement concludes various civil and criminal investigations. However, Binance still faces a pending civil case with the U.S. Securities and Exchange Commission related to securities law violations in June.