The American authorities have been investigating Binance, the largest cryptocurrency exchange platform in the world, and its general director, Changpeng Zhao, since at least 2018. As a result of the investigation, both Binance and Changpeng Zhao have agreed to an agreement with the American authorities, admitting to violating US anti-money laundering laws. This collective agreement includes two financial penalties that Binance will pay to US agencies under the US Treasury. The penalties imposed on Binance total $3.4 billion and $968 million, respectively.
The investigation and subsequent acceptance of responsibility by Binance and Changpeng Zhao have had significant implications for both parties. Changpeng Zhao, known by the nickname “CZ”, was scheduled to appear before a federal judge in Seattle, Washington, on Tuesday to plead guilty. Despite the legal action brought against the company and its CEO, the agreement ensures that Changpeng Zhao will retain his stake in the capital of Binance.
Binance had long continued to operate while being investigated by American authorities, even after committing to no longer accept American customers in 2019. The investigation revealed that Binance failed to implement anti-money-laundering measures, allowing a wide range of criminal actors to conduct trades on its platform. This lax approach to safety resulted in Binance not taking enough measures to prevent money laundering.
In a bid to ensure compliance with US regulations, Binance has agreed to use an external observer responsible for compliance for a period of three years. The company has also committed to adhering to all relevant regulations and laws during this time. The future of Binance and Changpeng Zhao will rely on their commitment to implementing and adhering to anti-money laundering measures.