During a press conference held on November 21, U.S. Department of Justice officials disclosed that Binance CEO Changpeng Zhao will admit guilt to a felony charge as part of a comprehensive resolution for both criminal and civil cases involving the exchange.
Attorney General Merrick Garland announced CZ's personal plea in a U.S. federal court, highlighting the $4.3 billion settlement that will encompass "civil regulatory enforcement actions" by various government bodies such as the U.S. Treasury Department and the Commodity Futures Trading Commission (CFTC).
Garland accused Binance of enabling individuals engaged in unlawful activities to transfer "stolen funds" through the platform, alleging that the exchange feigned compliance with U.S. federal laws by allowing specific users access to Binance despite connections to illicit funds. The exchange will face stringent monitoring, reporting prerequisites, and will need to submit suspicious activity reports for previous transactions, asserted the attorney general. He condemned Binance's profit-focused approach, emphasizing that using technology to circumvent laws equates to criminal behavior rather than mere vandalism.
Following Garland's statements, Treasury Secretary Janet Yellen revealed details of the settlement terms. Binance will pay over $3.4 billion in fines to the Financial Crimes Enforcement Network and approximately $1 billion to the Treasury Department's Office of Foreign Assets Control. CFTC Chairman Rostin Behnam outlined the proposed settlement, citing Binance's commitment to pay $2.7 billion in civil penalties and disgorgement of ill-gotten gains, with CZ and former compliance chief Samuel Lin contributing $150 million and $1.5 million, respectively. A portion of the settlement, approximately $1.8 billion, will be allocated by the Justice Department.
In a blog post on November 21, Binance expressed contentment in reaching an agreement with U.S. authorities, asserting its unwavering commitment to user security. The sealed indictment filed against CZ on November 14 cites one count of violating the Bank Secrecy Act, specifically for failing to uphold an effective anti-money laundering program at the cryptocurrency exchange. Court records pertinent to the charges against Binance and CZ remained sealed between November 14 and 21, as per prosecutors' request and mutual agreement between both parties.
The settlement effectively concludes multiple civil and criminal inquiries into the exchange that were initiated months ago. However, a pending civil case remains between the cryptocurrency exchange and the U.S. Securities and Exchange Commission, which in June accused Binance, Binance.US, and CZ of violating securities laws.
