Binance Must Exit US Completely As It Settles Criminal Investigation

Binance Must Exit US Completely As It Settles Criminal Investigation

According to the US Department of Justice (DOJ), Binance will have to exit the US market completely and also pay penalties of $4.3 billion.

This is one of the largest corporate penalties to have been imposed in the history of the United States and will be paid for settling violations of sanctions and anti-money laundering policies.

The settlement

The DOJ has been investigating the company and its leadership for years and this penalty and exit are the outcome of this investigation.

Changpeng Zhao, the founder of Binance, also pled guilty to charges of anti-money laundering violations and agreed to step down from his position as CEO and pay a separate penalty of $50 million.

According to the terms of the settlement, Zhao cannot be involved in the operations of the company for a minimum of three years.

The charges dictate that Binance opted to prioritize profits rather than legal compliance and did not use proper controls when serving US customers.

This enabled funds tied to hacking, terrorism and other criminal activities to flow through the crypto exchange undetected.

The DOJ said that Zhao had been aware that US users were key to Binance’s growth and they generated a significant source of revenue for the exchange.

In addition, he also knew that an effective program comprising of KYC and AML protocols would push some customers to not use the crypto exchange.


It said that Zhao had told employees that asking for forgiveness was better than asking for permission and gave priority to the growth of Binance over compliance with the laws in the US.

Merrick Garland, the Attorney General, said that during the investigation, they had obtained chats of Binance’s compliance offers.

These people were joking about laundering drug money and claiming that it was easy to do so through Binance.

Moreover, Binance had also failed to stop illegal trade between users in the US and people based in sanctioned countries like Iran worth $898 million.

The resolution

Therefore, the plea deal required Binance to pay a criminal fine of $1.8 billion and forfeit about $2.5 billion.

CZ’s individual plea is related to the absence of money laundering controls at Binance and violating the Bank Secrecy Act.

These charges are similar to the ones that Arthur Hayes, the founder of BitMEX, had pled guilty to in the past year.

Hayes had avoided prison by paying a fine of $10 million and had been sentenced to probation of two years.

The aim of the Binance resolution is to send crypto exchanges the message that they need to follow the law when serving US customers.

Garland said that breaking the law with the use of new technology is a criminal offense and it does not simply make these exchanges a disrupter.

The Attorney General further asserted that the Justice Department would not tolerate any crimes that are a threat to economic institutions.

This is because the trust of the public in the fairness of these institutions is compromised as a result.