- Binance Guilty Plea:
- Binance Holdings, operating Binance.com, pleads guilty to US federal charges: anti-money laundering (AML), unlicensed money transmitting, and sanctions violations.
- Founder and CEO Changpeng Zhao (CZ) resigns.
- Leadership Change:
- Richard Teng replaces CZ as the new Binance CEO.
- Fines and Agreements:
- Binance agrees to pay $4.3 billion in fines and forfeitures, one of the largest corporate penalties in US history.
- Agrees to retain an independent compliance monitor for three years and enhance AML and sanctions compliance programs.
- CZ’s Admission and Resolution:
- CZ pleads guilty to failing to maintain an effective AML program.
- CZ emotionally resigns, stating it’s the right thing for the community, Binance, and himself.
- US agencies do not allege misappropriation of user funds or market manipulation by Binance.
- Investigation Background:
- DoJ investigates Binance for violations related to the Bank Secrecy Act, failure to register as a money transmitting business, and the International Emergency Economic Powers Act.
- Legal Actions:
- CFTC filed charges against Binance and CZ for violations of the Commodity Exchange Act.
- SEC filed a lawsuit against Binance and CZ for alleged violations.
- CEO Succession:
- Richard Teng, former global head of regional markets for Binance, becomes the new CEO.
- CZ remains available for consultation as a shareholder and founder.
- US Crackdown on Crypto:
- FTX founder Sam Bankman-Fried recently found guilty of fraud.
- Justice Department successfully prosecutes CEOs of two major cryptocurrency exchanges, emphasizing the consequences of using technology to break the law.
- Compliance Controls Importance:
- Moody’s Analytics emphasizes the need for adequate compliance controls in the growing yet nascent crypto market.
- Crypto transactions are traceable and transparent, enabling successful tackling of financial crimes.
