Regulation

US Government Charges Binance with Conspiracy and Fraud

Published

12 months ago

November 21, 2023

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The United States government has brought forth criminal charges against Binance, the world’s largest cryptocurrency exchange by trading volume, in a significant development in the cryptocurrency sector. The charges, detailed in recently publicized documents, accuse the exchange of conspiracy, operating an unlicensed money-transmitting business, and infringing the International Emergency Economic Powers Act.

Binance Faces Legal Action for Noncompliance

The charges against Binance culminate a year-long criminal investigation by U.S. authorities. The investigation scrutinized the company’s compliance with U.S. financial regulations and anti-money laundering standards. According to the official filing, the government alleges that Binance systematically exploited the U.S. financial system from 2017 to 2022 without adhering to the required legal and regulatory frameworks.

The legal action against Binance marks a significant moment in the U.S. government’s ongoing efforts to regulate the burgeoning cryptocurrency market. The filing outlines a pattern of behavior by Binance that allegedly circumvented U.S. laws, posing a potential risk to the integrity of the U.S. financial system.

Zhao Pleads Guilty to Money Laundering

Due to these developments, Changpeng Zhao, the CEO of Binance, has resigned from his position. In a surprising turn of events, Zhao has also pleaded guilty to charges related to violating anti-money laundering requirements. This plea marks a pivotal moment in the case, showcasing the gravity of the situation and the potential repercussions for Zhao and Binance.

Reports earlier in the week hinted at a possible settlement between the Department of Justice (DOJ) and Binance. These reports suggested that the DOJ sought a settlement above $4 billion from the exchange. The events confirm these speculations, indicating a significant financial and reputational blow to the cryptocurrency exchange.

U.S. Attorney General Merrick Garland will discuss these developments in a forthcoming press conference. This address is expected to shed further light on the charges and the government’s stance on regulatory compliance in the cryptocurrency industry.