The largest cryptocurrency exchange platform in the world, Binance, and its general director, Changpeng Zhao, have reached an agreement with the American authorities, which provides for the resignation of the emblematic boss.
“CZ”, its nickname, has agreed to plead guilty to violating US anti-money laundering laws, the US Department of Justice announced on Tuesday.
As part of an overall agreement, Binance will also plead guilty to violations of US law and agreed to pay two fines of $3.4 billion and $968 million to two agencies under the US Treasury, the Department of Commerce said. Finance.
American authorities have been investigating the platform since at least 2018, according to several American media, but have not officially taken legal action until now.
Changpeng Zhao was scheduled to appear before a federal judge in Seattle, Washington, on Tuesday to plead guilty.
Co-founder, boss and majority shareholder of the company, the Canadian citizen born in China is the most famous personality in the world of digital currencies.
Binance is, by far, the largest cryptocurrency exchange, with around $12 billion in transactions carried out in the last 24 hours, according to the specialist site CoinMarketCap.
The American investigation, widely reported in the press, has for several years posed a threat to Binance, several executives of which have resigned in recent months.
Growth rather than conformity
In addition, the platform was taken to court this year by the two main financial market regulatory agencies, the SEC and the CFTC.
The latter criticizes Binance in particular for not having taken sufficient measures to prevent money laundering. In particular, customers could access the platform without their identity having been previously verified.
According to investigations by two Treasury agencies, Binance did not take measures to prevent transactions carried out by movements such as the Islamic State group, al-Qaeda or the Ezzedine al-Qassam brigades, the armed wing of Hamas.
“Failing to implement anti-money laundering measures, Binance allowed a wide range of criminal actors to conduct trades on the platform,” argued the US Treasury.
Digital currencies are regularly used by criminal organizations to transit their assets.
The sector offers, overall, a certain anonymity and fewer guarantees against money laundering than the traditional financial system, subject to very heavy compliance obligations.
“Since its origins, Binance, and its founder Changpeng Zhao, have preferred [respectivement] growth and personal wealth in defiance of financial regulations intended to prevent the laundering of criminal assets,” commented Seattle federal prosecutor Tessa Gorman, quoted in a press release.
The investigation also revealed that after committing, from 2019, to no longer accept American customers, Binance retained some, in particular those who were the most active and generated significant turnover for the site.
According to the Wall Street Journal, the agreement reached with the authorities would allow Changpeng Zhao to retain its stake in the capital of Binance. His sentence will not be known until a later date.
Binance has committed to the American authorities to use, for a period of three years, the services of an external observer responsible for compliance, and to comply with the texts in force in this area.