The guilty plea of crypto exchange Binance along with penalties and fines of $4.3 billion for settling its case were accepted by a federal judge.
This makes it the largest such assessment to have been made in the history of federal financial prosecutions.
The deal
The deal received approval late on Friday from Federal Judge Richard Jones, which includes a $2.5 million forfeiture for a financial penalty for not performing due diligence when providing its services.
It also included a fine of $1.8 million. In court documents, prosecutors of the US Department of Justice (DOJ) highlighted the failure of the exchange to implement an effective AML program.
They asserted that this enabled illicit actors to use the crypto exchange in different ways, which include the use of mixing services that can obfuscate the ownership and source of crypto tokens.
They added that the exchange was used for scams, moving the proceeds of transactions on the darknet market, moving proceeds from ransomware variants and other internet-related scams.
According to prosecutors, the deal with Binance involved the biggest penalty ever imposed in the history of the US Justice Department on a money services business.
They asserted that the size of the penalty was in accordance with the severity of the criminal conduct of Binance.
The DOJ
According to the DOJ, serious crimes were committed by the crypto exchange deliberately because it aimed to grow and expand as quickly as possible.
Therefore, the prosecutors asserted that the violations warranted such a significant sentence. They stated that the sentence proposed is quite appropriate because they have to hold the exchange accountable.
They also said that it would also act as a deterrent to other criminal actors. The massive penalty had first been mentioned in November when federal prosecutors and Binance were locked in negotiations.
However, the final deal was sealed last week by Federal Judge Richard A. Jones.
The founder
While the company has managed to settle its claims, the fate of its founder, Changpeng Zhao, or CZ, as he is known, remains uncertain.
Currently, he is on bail on a bond worth $175 million and his sentencing on violations of money laundering sanctions by the charges of the US Department of Justice (DOJ) has been postponed.
The sentencing will now take place on April 30th. While he awaits his sentencing, he is not permitted to be involved in managing or operating Binance.
Prosecutors are now demanding that Zhao should give a notice of at least three days before traveling and should surrender his Canadian passport.
Court documents showed that not only had Binance admitted guilt and agreed to pay the penalty, it was also prepared to cooperate with the government and work on its compliance program.
The crypto exchange is also ready to hire an independent compliance monitor. Binance has been making settlements to avoid any legal trouble.
It made a settlement with the Commodity Futures Trading Commission (CFTC) in December worth $2.7 billion and Zhao also had to pay a penalty of $150 million.