In a significant move, cryptocurrency exchange Binance has agreed to exit the U.S., pay billions in fines, and appoint a monitor for five years to settle charges with U.S. regulators. The settlement comes after allegations of violating anti-money laundering (AML) and sanctions laws.
Details of the Settlement
The settlement, which involves multiple agencies, includes the following components:
- A $3.4 billion payment to the Financial Crimes Enforcement Network (FinCEN) for violating the Bank Secrecy Act (BSA).
- A $968 million payment to the Office of Foreign Assets Control (OFAC) for violating sanctions programs.
- A $4.3 billion payment to the U.S. Department of Justice (DOJ) for violating sanctions law and failing to maintain a proper know-your-customer (KYC) program.
- The appointment of an independent monitor to oversee Binance’s compliance with AML and sanctions regulations for five years.
Binance’s CEO Steps Down
As part of the settlement, Binance’s founder and CEO, Changpeng “CZ” Zhao, has resigned from his position. The company has not yet announced a replacement for Zhao.
Impact of the Settlement
The settlement is a major blow to Binance, which is the world’s largest cryptocurrency exchange by trading volume. The company will now have to exit the U.S. market and pay billions in fines. It is also unclear how the appointment of a monitor will impact Binance’s operations.
Significance of the Settlement
The settlement is significant because it sends a strong message that U.S. regulators are serious about cracking down on cryptocurrency exchanges that are not complying with AML and sanctions laws. The settlement could also have a ripple effect on other cryptocurrency exchanges, prompting them to strengthen their compliance programs.
Related: Binance CEO Changpeng Zhao (CZ) Steps Down, Richard Teng Named New CEO
Future of Binance
It remains to be seen how Binance will recover from this setback. The company will need to find a way to operate without a U.S. presence and rebuild trust with regulators and customers.