Antelope Valley Press

Zhao, Founder of Binance, pleads guilty


WASHINGTON (AP) — The US government dealt a massive blow to the world’s largest cryptocurr­ency exchange Binance as its founder, Changpeng Zhao, pleaded guilty to a felony charge Tuesday related to his failure to prevent money laundering on his platform.

Binance also agreed to a roughly $4 billion settlement with the US over violations of the Bank Secrecy Act and apparent violations of sanctions programs, including failure to put into place a suspicious transactio­n reporting programs. Zhao announced that he stepped down as the company’s chief executive.

Over the summer, the company was accused of operating as an unregister­ed securities exchange and violating a slew of US securities laws in a lawsuit from regulators. That case was similar to practices uncovered after the collapse of FTX, the second largest cryptocurr­ency exchange, last year.

“Binance became the world’s largest cryptocurr­ency exchange in part because of the crimes it committed — now it is paying one of the largest corporate penalties in US history,” said Attorney General Merrick B. Garland. “The message here should be clear: using new technology to break the law does not make you a disruptor, it makes you a criminal.”

Zhao pleaded guilty to one count of failure to maintain an effective anti-money-laundering program in federal court in Seattle. Binance is a Cayman Islands limited liability company.

Binance said in a statement that it made “misguided decisions” as it quickly grew to become the world’s largest crypto exchange and that the settlement acknowledg­es its “responsibi­lity for historical, criminal compliance violations.”

“Ever since Binance launched its convertibl­e virtual currency platform, it has knowingly evaded the US laws designed to protect these systems,” Treasury Secretary Janet Yellen said. “Binance was allowing illicit actors to transact freely, supporting activities from child sexual abuse, to illegal narcotics, to terrorism, across more than 100,000 transactio­ns.”

The US Treasury said Binance allowed Hamas’ military wing al-Qassam Brigades, Palestinia­n Islamic Jihad, al-Qaeda and other criminals to conduct transactio­ns.

“Binance processed these transactio­ns, but it never filed a single suspicious activity report,” Yellen said. “And it also allowed over 1.5 million virtual currency trades that violated US sanctions.”

As part of a settlement agreement, Binance will be subject to five years of monitoring and “significan­t compliance undertakin­gs..

 ?? ASSOCIATED PRESS ?? The Binance app icon is seen on a smartphone in Marple Township, Pa
ASSOCIATED PRESS The Binance app icon is seen on a smartphone in Marple Township, Pa

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