Changpeng Zhao, CEO of the world's largest crypto company Binance, pleaded guilty to anti-money laundering charges during a hearing in Seattle federal court yesterday, where he agreed to pay a $50 million fine.
This step comes within the framework of a comprehensive deal reached with the Ministry of Justice to ensure the continuity of the company’s work. Chao agreed to resign as part of this settlement, which includes the Treasury Department and the Commodity Futures Trading Commission.
Binance also agreed to plead guilty to criminal charges and pay a $4.3 billion fine. This deal ended a years-long investigation in the world of digital currencies.
Previous reports indicated attempts by the US Department of Justice to obtain between 4 and 5 billion dollars from Binance to settle a years-long investigation into the operations of the largest cryptocurrency exchange in the world.
In recent months, the company has been on trial on charges of being an unregistered securities exchange and major violations of US securities laws, prompting regulators to file a lawsuit.
Binance, the company was set up as a limited liability company in the Cayman Islands by Chow, better known as CZ. The charges were similar to those brought against FTX, the second-largest cryptocurrency exchange, last year.
CZ was also accused of diverting client funds and concealing the fact that billions of dollars in investor assets were mixed and transferred to a third party owned by CZ.
The US Securities and Exchange Commission filed a lawsuit against the company, while Binance confirmed that it was cooperating in the investigation, but considered that the agency chose to act unilaterally and litigate.
Scandals and collapses in the cryptocurrency market have damaged the industry. Sam Bankman-Fried, founder of the failed cryptocurrency brokerage, was convicted of defrauding and stealing at least $10 billion from clients and investors.
Meanwhile, the Binance-linked cryptocurrency, BNB, saw a near-10% decline following recent reports. The digital currency achieved its highest level in five months earlier in yesterday's trading based on news indicating that a settlement had been established with the Ministry of Justice.
The accusation indicates that Binance and Zhao engaged in a deliberate and organized activity to take advantage of the US market, between approximately August 2017 and October 2022, without complying with the required laws.
The decision against the world's largest cryptocurrency exchange and its president is one of the largest penalties in the cryptocurrency industry, with the company facing close scrutiny from the Department of Justice, other government agencies and lawmakers.
Binance appeared on the cryptocurrency scene in 2017, and quickly overtook larger competitors, its market share rising to more than 60% globally after the collapse of FTX in November 2022. Since then, its market share in cryptocurrencies has fallen to less than 44% this year. Month, according to CC Data.
