Binance Faces $4 Billion Fine and CEO Resignation, Changpeng 'CZ' Zhao Published on $175M Bond

By: Eva Baxter

Global cryptocurrency exchange company, Binance, announced its resolution regarding investigations from the U.S. Department of Justice (DOJ) and other agencies. Admitting to past wrongdoings, the company stated inadequate compliance controls when it first launched. It's now taking responsibility for these previous offenses, stressing no allegations were made regarding misappropriation of user funds or market manipulation.

The DOJ found Binance violated financial laws like the Bank Secrecy Act and failed to register as a money transmitting business. The platform did not implement effective anti-money laundering (AML) and know-your-customer (KYC) procedures, neglecting to monitor or report suspicious activities. In response, Binance claimed to have recently expanded its AML tools and claimed to be one of the first foreign exchanges with mandatory KYC for all users.

While addressing the allegations, Binance also acknowledged its violation of the International Emergency Economic Powers Act in respects to international transaction restrictions. It is now agreeing to pay over $4 billion in fines, retain an appointed monitor for three years, and improve compliance. As part of resolution, former CEO, Changpeng Zhao, is stepping down, agreeing to pay a $175 million release bond and committing to attend his US court hearing in February 2024.