Binance to pay $4.4 billion fine for involvement in terrorist financing and other illegal activities
In the United States, Binance is accused of being used for terrorist financing, money laundering, and other illegal activities that allowed Hamas, ISIS, and other terrorist organizations to conduct operations, as well as residents of sanctioned jurisdictions.
This is stated on the website of the US Treasury.
As part of the settlement, the company will pay $3.4 billion to FinCEN and $968 million to OFAC. This is one of the largest corporate fines in US history.
Binance will also make a “full withdrawal” from the US as part of the agreement with FinCEN and appoint an observer for a period of five years to monitor the exchange’s sanctions compliance program. During this time, the US Treasury Department will have access to the platform’s data and systems. But Binance US will not be affected.
Changpeng Zhao, the company’s founder and chairman, will resign and personally pay a $50 million fine. Richard Ten will become the new head of the exchange. He emphasized that “the foundation on which Binance stands today is stronger than ever.”
“Thanks to the support of CZ and our leadership, I have taken on this role so that we can continue to meet and exceed stakeholder expectations while achieving our core mission of money freedom,” Ten wrote on social media site X.
According to Bloomberg, the investigation into Zhao is ongoing and he could receive up to 10 years in prison, although experts believe that the term will be no more than 18 months.
Binance admitted that it failed to prevent payments to the Hamas group through its platform. It has also been used to conduct at least 1.1 million transactions totaling more than $898 million between US and Iranian clients.
“Binance has become the largest cryptocurrency exchange in the world in part because of the crimes it committed, and now it will pay one of the largest corporate fines in U.S. history,” said U.S. Attorney General Merrick Garland.
U.S. Treasury Secretary Janet Yellen added that Binance ignored its legal obligations in pursuit of profit.
Exchange representatives wrote about reaching an agreement “with several US agencies regarding their investigations.”
“This will allow us to turn the page on a challenging but transformative chapter of learning that has helped us become a stronger and safer platform,” Binance said.
The agreement marks the end of a multi-year investigation into the crypto exchange conducted by the US Department of Justice, the Treasury Department, and the Commodity Futures Trading Commission (CFTC).
