The US Government is reportedly seeking a settlement of more than $4 billion from Binance, the world’s largest cryptocurrency exchange, to resolve a criminal investigation into its activities, according to Bloomberg.
Bloomberg cited unnamed sources familiar with the matter, who said that the negotiations are ongoing, and no final agreement has been reached. The sources also said that the settlement amount could change depending on the outcome of the talks.
The US Department of Justice (DOJ) and the Commodity Futures Trading Commission (CFTC) have been probing Binance for alleged violations of anti-money laundering, tax evasion, market manipulation and other laws, as well as its role in facilitating transactions involving illicit funds.
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Binance has faced increased regulatory scrutiny and pressure from authorities around the world in recent months, including in the UK, Japan, Germany, Singapore, Canada and Hong Kong. The exchange has repeatedly denied any wrongdoing and said that it complies with all applicable laws and regulations.
Binance CEO Changpeng Zhao, also known as CZ, has expressed his willingness to cooperate with regulators and said that he is open to relocating the company’s headquarters to a more favorable jurisdiction. He has also hired former US government officials and regulators to bolster Binance’s compliance efforts.
A settlement of $4 billion would be one of the largest ever imposed on a cryptocurrency company, surpassing the $1.9 billion fine that HSBC paid in 2012 for facilitating money laundering for drug cartels and terrorists.
If Binance agrees to pay the settlement, it could potentially end its legal troubles in the US and pave the way for a more harmonious relationship with regulators. However, it could also set a precedent for other cryptocurrency exchanges and platforms that are facing similar investigations or actions from authorities.
Binance Agrees to Pay over $4 Billion to Resolve US Criminal Case
Binance, the world’s largest cryptocurrency exchange by trading volume, has reached a settlement with the US Department of Justice and the Securities and Exchange Commission to resolve a criminal investigation into its operations. According to a joint statement issued by the regulators on Monday, Binance has agreed to pay more than $4 billion in fines, disgorgement, and restitution to victims of its illicit activities.
The settlement comes after a two-year probe that revealed Binance had violated various US laws, including the Bank Secrecy Act, the Foreign Corrupt Practices Act, and the Securities Act of 1933. The regulators accused Binance of facilitating money laundering, market manipulation, insider trading, offering unregistered securities, and bribing foreign officials to evade regulatory scrutiny.
As part of the settlement, Binance has admitted to its wrongdoing and agreed to cooperate with the authorities in ongoing and future investigations. Binance has also agreed to implement a comprehensive compliance program and to hire an independent monitor to oversee its operations for the next three years.
The regulators praised Binance for its cooperation and willingness to resolve the matter without litigation. They also warned other cryptocurrency platforms that they must abide by the same rules and regulations as traditional financial institutions or face severe consequences.
Binance’s CEO Changpeng Zhao, also known as CZ, issued a statement on Twitter, expressing his relief and gratitude for the settlement. He said that Binance has learned from its mistakes and is committed to becoming a more responsible and transparent company. He also thanked Binance’s loyal customers and partners for their support and trust throughout the ordeal.
The settlement is expected to have a positive impact on Binance’s reputation and business prospects, as it clears the legal uncertainty that has been hanging over the company for a long time. Binance is also hoping to improve its relations with regulators around the world and to obtain licenses to operate in more jurisdictions.
Binance CEO Changpeng Zhao will plead guilty to U.S. money laundering violations in federal court in Seattle on Tuesday, The Wall Street Journal reports, citing anonymous sources. Zhao will step down as head of the world’s largest crypto exchange as part of an agreement that will settle the Justice Department’s yearslong probe into Binance. The company will plead guilty to three separate criminal charges and pay fines totaling $4.3 billion, per CNBC. The deal reportedly allows Zhao to retain his majority stake but bars him from holding any executive roles at the firm, which will be allowed to continue operations.
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Similar charges were brought against Arthur Hayes, the co-founder and CEO of BitMEX, who pleaded guilty last year to violating U.S. anti-money-laundering laws, paid a $10 million fine and was sentenced to two years of probation. The date of Zhao’s sentencing hearing is yet to be announced. (LinkedIn News)