In the latest blow to the beleaguered cryptocurrency industry, the Department of Justice charged major cryptocurrency exchange Binance and its CEO with violating US money laundering laws and violating US economic sanctions in the US District Court for the Western District of Washington.
According to a report from Wall Street JournalBinance founder and CEO Changpeng “CZ” Zhao will step down and plead guilty to charges in federal court in Seattle on Tuesday. The company also agreed to pay $4.3 billion in fines.
The 32-page complaint includes three counts of money laundering, conducting an unlicensed money transfer business, and sanctions violations.
According to a report from ReutersBinance will pay $3.4 billion to the Treasury Department’s Financial Crimes Enforcement Network Office and $968 million to the Treasury Department’s Sanctions Unit.
The Justice Department’s lawsuit, which comes after months of speculation that the agency had Binance in its crosshairs, comes after the Securities and Exchange Commission filed a lawsuit against Binance in June, alleging that the exchange violated securities law and mishandled customer assets. This came eight months after the CFTC filed civil charges.
Although the exchange’s former chief strategy officer, Patrick Hellman, told… magazine In February, as Binance expected to pay fines to settle its investigations, the Justice Department will also file criminal charges against Zhao, according to new reports from magazine.
A Binance spokesperson did not immediately respond to a request for comment.
After Zhao, a former software developer at Bloomberg, founded Binance in 2017, it rose to become the world’s largest cryptocurrency exchange. With the rapid success came growing pains, as the company struggled to implement know-your-customer and money-laundering provisions. Lengthy complaints from the SEC and CFTC detailed the prioritization of profit over compliance, and Binance even pushed US VIP clients to use its global platform, despite it being blocked locally.
While Binance has made a public push for compliance in recent years, including hiring former DEA and Gemini veteran Noah Perlman as chief compliance officer, the exchange has been unable to shake off its reputation for skirting the rules.
The Justice Department’s charges represent the culmination of the company’s failure to change opinions in the United States, and a potential end to its operations in a country increasingly hostile to cryptocurrencies.
With Zhao expected to step down, the question of his successor remains open. Forbes It was reported that Richard Ting, who currently holds the position of President of Regional Markets outside the United States, is considered one of the most prominent contenders for this position.
The price of BNB, the native token of the Binance blockchain, rose after news of the settlement first leaked, though it fell from a high of $270 to around $240 as of 1:15 PM ET.