• The United States Department of Justice, in its press release, stated that Binance is set to pay “one of the largest corporate penalties in U.S. history”.
  • DOJ accused Binance of earning $1.6 billion worth of profits by allowing users to trade despite lacking KYC certification.
  • Binance founder Changpeng Zhao confirmed his exit, naming Richard Teng, former Global Head of Regional Markets, as the new CEO.

The United States Department of Justice (DOJ) officially indicted Binance and its Chief Executive Officer (CEO), Changpeng Zhao, on Tuesday. The DOJ, in its press release, alleged Binance of not only violating the Bank Secrecy Act but also failing to register as a money transmitting business as well as allowing illicit transactions on the exchange.

US DOJ takes on Binance

The US Justice Department, along with other key members of the United States government, provided details of their investigation into Binance. Accusing Binance of violating several anti-money laundering laws, the DOJ also charged founder Changpeng Zhao with failing to enforce these laws, resulting in Zhao’s resignation as CEO.

Here are the key takeaways from the DOJ indictment:-

  • Attorney General Merrick B. Garland stated that Binance is set to pay $4 billion to resolve the DOJ’s investigation. This makes it  “one of the largest corporate penalties in U.S. history”.
     
  • Secretary of the Treasury Janet L. Yellen added to the DOJ’s remarks, saying,

“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.

  • Acting U.S. Attorney Tessa M. Gorman for the Western District of Washington accused Binance of enabling multiple terrorist and extremist organizations across the world, stating,

“Because Changpeng Zhao knowingly operated a financial platform without basic anti-money laundering safeguards, the company caused illegal transactions between U.S. users and users in sanctioned jurisdictions such as Iran, Cuba, Syria, and Russian-occupied regions of Ukraine – transactions for which Binance profited with significant fees.”

  • The DOJ also confirmed that Binance generated more than $1.6 billion worth of profits by allowing users who had not provided KYC to conduct trillions of dollars in transactions on the platform. 
     
  • In addition to Zhao stepping down as the CEO of Binance, the exchange also agreed to resolve the investigation by paying a penalty of $4.3 billion. 
     
  • Binance has also agreed to retain an independent compliance monitor for three years and has separately also reached agreements with the Financial Crimes Enforcement Network (FinCEN) Office of Foreign Assets Control (OFAC), and the U.S. Commodity Futures Trading Commission (CFTC).

The next CEO of Binance

Confirming his guilty plea as well as his exit from Binance as CEO, Changpeng Zhao provided a statement following the events that transpired on November 21. Zhao stated that going forward, the new CEO of Binance will be the former Global Head of Regional Markets, Richard Teng.

Zhao added that he would remain available to the cryptocurrency exchange as a consultant after taking a break from the industry for a while. Concluding his statement, CZ noted that,

“I am proud to point out that in our resolutions with the U.S. agencies, they:

- do not allege that Binance misappropriated any user funds and
- do not allege that Binance engaged in any market manipulation.

Funds are SAFU!

Read more - Breaking: Richard Teng steps up as new Binance CEO as Changpeng Zhao confirms resignation


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Bitcoin falls below $92,000 as exchanges show overheating conditions

Bitcoin falls below $92,000 as exchanges show overheating conditions

Bitcoin (BTC) continues its ongoing correction, falling below $92,000 on Monday after declining almost 4% last week. CryptoQuant data shows that BTC is overheating in exchanges and suggests further decline ahead.

More Bitcoin News
Top altcoins Solana and Cardano show bearish signs in momentum indicators

Top altcoins Solana and Cardano show bearish signs in momentum indicators

Solana’s price extends its decline on Monday after falling more than 11% in the previous week. Cardano’s price trades in red on Monday after correcting over 11% last week.

More Cryptocurrencies News
Ondo Price Forecast: 20% ONDO unlock on January 18

Ondo Price Forecast: 20% ONDO unlock on January 18

Ondo price continues to edge down, trading around $1.16 on Monday after declining more than 21% in the previous week. Ondo Foundation tweeted that there will be a 20% ONDO unlock on January 18, leading to 134% of the current circulating supply. 

More Ondo News
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC and ETH show weakness while XRP remains strong

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC and ETH show weakness while XRP remains strong

Bitcoin and Ethereum prices continue to trade in red on Monday after declining more than 3% and 10% in the previous week. However, Ripple remains strong and breaks above its upper symmetrical triangle boundary, suggesting a rally ahead.

More Cryptocurrencies News
Bitcoin: Room for a recovery or continuation of the pullback?

Bitcoin: Room for a recovery or continuation of the pullback?

Bitcoin’s price slightly recovers and trades around $94,700 on Friday after declining nearly 6% earlier this week. US Bitcoin spot Exchange Traded Funds data shows signs of mild recovery, with a total net inflow of $462.2 million until Thursday.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP