CZ, founder of cryptocurrency giant Binance, pleads guilty to money laundering violations

Binance founder and CEO Changpeng Zhao has agreed to plead guilty to money laundering violations and withdraw from the world’s largest cryptocurrency exchange as part of a comprehensive settlement with U.S. law enforcement and financial regulators.

As part of the deal, CZ will also pay a $50 million fine, while Binance will pay a $4.3 billion fine. The settlement will allow Binance to continue operating.

The announcement from the Justice Department, Treasury Department and Commodity Futures Trading Commission comes less than a month after federal prosecutors convinced a jury to find CZ’s one-time rival and FTX founder Sam Bankman-Fried guilty of seven criminal charges, including fraud and fraud. Fraud. money laundering.

“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed—and now it is paying one of the largest corporate fines in U.S. history,” Attorney General Merrick B. Garland . Garland) said in a statement.

The U.S. Department of Justice said it plans to maintain its aggressive stance against cryptocurrency players.

“Just in the past month, the Department of Justice successfully bribed the CEOs of two of the world’s largest cryptocurrency exchanges in two separate criminal cases,” the attorney general said. “The message here should be clear: There is no need to break the law by leveraging new technologies. It makes you a destroyer, it makes you a criminal.”

Regulator issues warning to other cryptocurrency players

The deal ends investigations into Binance by the U.S. Department of Justice and commodities regulators, although the company could still face stiff penalties from the U.S. Securities and Exchange Commission.

Binance did not immediately respond to a request for comment.

“The result of these agreements will be an end to corporate conduct that has long posed risks to the U.S. financial system, American citizens, and national security,” U.S. Treasury Secretary Janet Yellen said in a statement.

She also warned other cryptocurrency players about the need to comply with U.S. regulations.

Yellen said: “If virtual currency exchanges and financial technology companies hope to realize the tremendous benefits of being part of the U.S. financial system and serving American customers, they must comply with the rules. If they do not do so, the U.S. government will take action. “

Major players in the cryptocurrency space

Binance is a one-stop shop for investors in cryptocurrencies and other digital assets, symbolizing the borderless nature of the new crypto economy.

It has no official headquarters, and CZ has become a well-known player in the cryptocurrency space, having spent much of his adult life moving from city to city, mostly in Asia and the Middle East.

Last year, Binance’s market share grew after the collapse of FTX. But in recent months, as the SEC and other regulators scrutinized Binance’s operations, users have fled to other cryptocurrency exchanges.

The company has also seen senior executives depart and lay off thousands of jobs globally.

While the settlement marks a major reprieve for Binance, its legal troubles are far from over.

The SEC, under the leadership of Chairman Gary Gensler, has aggressively targeted the cryptocurrency industry under existing regulations.

The SEC alleges that CZ and Binance “engaged in an extensive web of deception, conflicts of interest, lack of disclosure and deliberate circumvention of the law” in their operations.

The charges include accusations that Binance and CZ failed to clearly distinguish between their U.S. and international operations as required by existing regulations and allowed illegal activities such as money laundering to be conducted on cryptocurrency exchanges.