US prosecutors have filed criminal charges against Binance, accusing the world’s largest cryptocurrency exchange of anti-money laundering failures and breaching international sanctions in a sweeping document unsealed in federal court. The charges put new pressure on Binance and its chief executive Changpeng Zhao, who rose to prominence as one of the crypto industry’s most outspoken and influential leaders. The group earlier this year was hit with civil charges from two US financial regulators. Zhao appeared in a Seattle federal court on Tuesday and pleaded guilty to anti-money laundering charges and will pay a $50mn fine, Bloomberg reported. He will step down from Binance as part of the settlement. The US Department of Justice alleged the exchange failed to establish an anti-money laundering programme and “wilfully caused violations of US economic sanctions”. The group facilitated transfers between the US and sanctioned jurisdictions including Cuba, Syria and Iran, the court document said. 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. The alleged misconduct occurred between at least August 2017 and October 2022, according to court filings. The charges dramatically expand US authorities’ crackdown on the crypto industry. The Department of Justice in 2021 set up a new unit focused on criminal misuse of digital assets, as the Joe Biden administration has emerged as one of the jurisdictions with the toughest stance on crypto worldwide. Binance did not respond to multiple requests for comment. The justice department declined to comment on these reports. Mark Kornfeld of law firm Buchanan Ingersoll and Rooney said: “DoJ action against the main crypto player is a very significant development for this industry as a whole. This is proof that this is the new normal, not just a random development for the industry, everyone is on pretty significant notice that this is the way it’s going to be.” The Commodity Futures Trading Commission in March accused Binance and Zhao of operating illegally in the US. The civil complaint alleged that much of the group’s reported trading volume and profitability have come from “extensive solicitation of and access to” US customers, contradicting the exchange’s claims. Months later, the US Securities and Exchange Commission filed 13 civil charges accusing Binance of violations including mixing billions of dollars of customer cash with a separate trading firm owned by its chief executive and operating unregistered exchanges, broker-dealers and clearing agencies. Under Zhao’s stewardship, the group grew from a modest start-up in the summer of 2017 into a giant with employees in dozen of countries. By November 2022 — days after the collapse of once-fierce rival FTX — Binance controlled more than half of the crypto market. But under the weight of increasing regulatory scrutiny in 2023, the crypto giant’s grip on power has dwindled and now handles roughly a third of the market.
Binance Crypto Exchange Hit With US Criminal Charges – WorldNewsEra
