US DOJ claims Binance churned $1.6 billion worth of profits via illegal transactions

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