Binance Founder Steps Down as CEO, Reaches Largest Settlement with US Authorities

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Binance Founder Steps Down as CEO, Reaches Largest Settlement with US Authorities

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Changpeng Zhao, the founder of Binance, the world’s largest cryptocurrency exchange, has reached a settlement with US authorities following allegations that the platform failed to prevent money laundering.

On Tuesday, Zhao pleaded guilty to a felony charge related to this failure and simultaneously announced his resignation as the CEO of Binance.

US authorities assert that Binance deliberately withheld information from law enforcement, undermined sanctions controls, and neglected to report suspicious transactions, including those involving child sexual abuse, illegal drugs, and terrorism. The accusations encompass violations of the Bank Secrecy Act and apparent breaches of multiple sanctions programs.

The US Treasury, in what it termed the “largest settlements in history,” announced that Binance agreed to settle with US agencies. The charges involve failure to prevent and report suspicious transactions linked to entities such as the al-Qassam Brigades, Palestinian Islamic Jihad, al-Qaeda, and the Islamic State.

Also Read: Ferrari To Allow Crypto Currency Payments For Cars

Binance is also accused of not reporting or preventing transactions by ransomware attackers and money launderers. Additionally, the platform is alleged to have facilitated trading between US users and individuals in sanctioned jurisdictions like Iran, North Korea, Syria, and Crimea.

US Treasury Secretary Yellen emphasized that Binance’s “willful failures” allowed funds to flow to terrorists, cybercriminals, and child abusers, stating, “Binance turned a blind eye to its legal obligations in the pursuit of profit.”

As part of the settlement agreement with the Financial Crimes Enforcement Network (FinCEN), Binance will pay a penalty of $3.4 billion and undergo a five-year mentorship. The platform will also pay an additional penalty of $968 million. Zhao, in a social media post, highlighted that the resolutions with US agencies did not allege misappropriation of user funds or engagement in market manipulation by Binance.

This development comes amid challenges in the cryptocurrency industry, including the collapse of FTX and the recent conviction of its founder, Sam Bankman-Fried, on fraud charges.

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