Crypto exchanges decline following fine imposed on Binance

In a statement from the US Department of the Treasury, it was noted that Binance will pay $3.4 billion as part of an agreement with the Financial Crimes Enforcement Network (FinCEN) and $968 million as part of an agreement with the Office of Foreign Assets Control (OFAC).

The statement indicated that by failing to comply with anti-money laundering and sanctions laws, Binance allowed a series of illicit actors to trade freely on its platform.

The statement, which noted that the agreement includes significant commitments such as 5 years of monitoring and ensuring Binance's complete exit from the US, also stated that if the agreement's obligations are not met, Binance could face additional penalties, including a $150 million deferred fine to be collected by FinCEN.

US: PERMITTED OVER 1.5 MILLION VIRTUAL CURRENCY TRADES THAT VIOLATED SANCTIONS

US Treasury Secretary Janet Yellen, US Attorney General Merrick Garland, US Deputy Attorney General Lisa Monaco, and Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam held a joint press conference on the matter.

During the press conference, US Treasury Secretary Yellen explained that FinCEN, OFAC, and the IRS had been investigating Binance's operations for over 3 years.

Stating that Binance had claimed to have exited the US market years ago, but was found to have actually maintained significant connections with US users and the country, Yellen noted that the company also failed to report suspicious transactions.

Yellen reported that the platform allowed more than 1.5 million virtual currency trades that violated US sanctions.

BINANCE ADMITTED TO THE CHARGES

US Attorney General Merrick Garland also stated that Binance admitted to intentionally committing the violations, emphasizing that the approximately $4.3 billion Binance will pay is one of the largest fines ever imposed.

Providing information that a monitoring and reporting requirement was also imposed on Binance as part of the agreement, Garland noted that the company must review past transactions and report suspicious activities to federal authorities.

Garland stated that they have filed criminal charges against Binance CEO Changpeng Zhao for intentionally violating the relevant law, and reported that Zhao presented his plea in person at the US District Court for the Western District of Washington earlier today.

BINANCE CEO CZ (ZHAO) RESIGNED

Meanwhile, Binance CEO Zhao, who was born in China and immigrated to Canada at the age of 12, agreed to resign and pay a $50 million fine as part of the agreement.

In a post on his X account, Zhao stated that he made mistakes and must take responsibility, announcing that he is stepping down as CEO of the company as it is the right thing to do for Binance and himself.

Emphasizing that Binance is no longer a "baby" and that it is time to let the company walk and run, Zhao commented, "I know that Binance will continue to grow and succeed with the deep infrastructure it has."

Pointing out that Richard Teng, one of the company's senior executives, will now serve as Binance CEO, Zhao stated that Teng will set the company's direction in its next growth phase with over 30 years of experience in financial services and regulation.

Stating that as a shareholder and former CEO with historical knowledge of the company, he will be available to provide consultation as needed in accordance with the agreement reached with the US government, Zhao noted that he has not taken a real break in the last 6.5 years, and for this reason, he will first take a break from his work for a while.

Zhao stated that he will likely make some long-term investments from now on, that he does not see himself as a CEO running a startup again, and that if he were to be a listener, he might be open to mentoring a small number of new entrepreneurs privately.

Pointing to the agreement reached with the US, Zhao noted that it is not alleged that Binance misappropriated any user funds or engaged in any market manipulation.