Adedapo Adesanya
By Adedapo Adesanya
Binance Coin (BNB) has dropped by 9 per cent after the founder of the world’s largest crypto exchange, Mr Changpeng “CZ” Zhao, resigned from his position as Binance CEO as he pleaded guilty to violating criminal anti-money laundering requirements.
The coin was trading at $235.95 as of press time while Bitcoin (BTC), the world’s largest coin, was 2.3 per cent down at $36,524.77.
The US Justice Department (DOJ) announced a $4.3 billion settlement with Binance, and the exchange appointed a new CEO.
Binance has also pleaded guilty to charges, including conspiring to knowingly conduct an unlicensed money-transmitting business and knowingly and wilfully causing the exportation of services to Iran, the Department of Justice said.
Prosecutors alleged the exchange failed to establish an anti-money laundering programme and wilfully caused violations of US economic sanctions.
The charges alleged Binance failed to register with the US Treasury as a “money transmitting business… in part to prevent” regulators from discovering it facilitated billions of dollars in crypto transactions without implementing appropriate “know your customer” measures.
Binance facilitated transfers between the US and sanctioned jurisdictions including Cuba, Syria, and Iran, the court document said.
The alleged misconduct occurred between at least August 2017 and October 2022, according to court filings.
The deal would allow Mr Zhao to retain his majority stake in Binance, indicating he likely won’t face jail time as part of the plea bargain, and he won’t be allowed to hold an executive position at the company.
However, the plea deal won’t affect pending litigation with the US Securities and Exchange Commission (SEC), as it does not include a settlement for the case it brought against Binance in June.
It was also found that Binance’s policies allowed criminals involved in illicit activities to move “stolen funds” through the exchange.
The US Attroney-General, Merrick Garland alleged the exchange “pretended to comply” with US federal laws by offering paths for certain users to access Binance despite their ties to illicit funds.
The attorney general said the exchange would be subject to monitoring and reporting requirements and required to file suspicious activity reports for past transactions.
