Binance: Know Your Rights and Responsibilities with AML Regs

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• Binance will exit the US and pay a $4.3 billion fine announced by the US Department of Justice today to resolve anti-money laundering and sanctions violations.
• CEO Changpeng Zhao, after admitting guilt to anti-money laundering violations, also resigned, accepting an additional $50 million fine.
• The accusations state that Binance focused on profits rather than legal compliance, serving US customers without proper controls.

Binance exchange suffered a major blow today: Facing accusations from the Ministry of Justice, the exchange will resolve its violations by paying a fine.

Binance Will Pay Fines to Resolve Its Violations

Binance will exit the US and pay a $4.3 billion fine to resolve anti-money laundering sanctions violations, the US Department of Justice announced today. The exit and sentencing resolve anti-money laundering and sanctions violations that were the result of a years-long investigation into the company and its leadership.

CEO Changpeng Zhao, after admitting guilt to anti-money laundering violations, also resigned, accepting an additional $50 million fine. The agreement also prohibits any current or future relationship between Zhao and the company, said Acting Deputy Attorney General Nicole M. Argentieri during a press conference.

The allegations indicate that Binance prioritized profits over legal compliance, serving US customers without proper controls, allowing funds related to terrorism, hacking, and other crimes to flow through Binance without detection. The DOJ stated in a press release:

“Zhao knew that US users were a fundamental and significant source of revenue for Binance’s growth and that an effective AML program would include KYC protocols that would cause some customers to choose not to use Binance. Zhao told employees that ‘asking for forgiveness is better than asking for permission’ and prioritized Binance’s growth over compliance with US laws.”

Attorney General Merrick Garland, in a statement during the Tuesday evening press conference, said that the chats obtained during the investigation showed compliance officers at the company joking, “Is it too hard to launder drug money these days? Come to Binance. We have your cake.”

Binance’s connection with Iran

Binance also failed to stop illegal trades exceeding $898 million between US users and users in sanctioned countries like Iran. As part of the agreement, Binance forfeited over $2.5 billion and paid a fine of $1.8 billion. Zhao’s guilt lies in the lack of anti-money laundering controls.

The resolution aims to send a message to crypto exchanges serving US customers that compliance with the US legal system is required. The use of new technology does not excuse criminal activity. When profits are prioritized over compliance, consequences arise in the US legal system.