American justice once again takes out its big stick to punish the biggest stock market cryptocurrencies, Binance. She will have to pay a fine of 4.3 billion dollars. She is accused of having violated American law in its various transaction operations. The two main American regulatory agencies financial markets, the SEC and the CFTC sued the platform of exchange for having facilitated or even permitted money laundering by groups criminals.
American regulatory agencies actually criticize Binance for not having taken necessary measures to monitor in order to prevent criminal groups to go through the platform for their transactions. Binance customers could access to use the platform without any verification of their identify. Investigators from two US Treasury agencies accuse Binance of not having taken measures to prevent transactions carried out by movements like the Islamic State group, al-Qaeda or the Ezzedine al-Brigades Qassam armed branch of Hamas.
“Failing to apply anti-money laundering measures, Binance allowed a large number of range of criminal actors to carry out exchanges on the platform”, explained the American treasure.
According to US Treasury investigators, digital currencies are all time used by criminal organizations to transit their assets. The Cryptocurrency industry basically allows for total anonymity and fewer guarantees against money laundering than the traditional banking system which is subject to very heavy regulatory obligations.
“Since its origins, Binance, and its founder Changpeng Zhao, have preferred (respectively) growth and personal fortune in defiance of financial regulation intended to prevent the laundering of criminal assets”, commented Tessa Gorman, the Seattle prosecutor, quoted in a press release. The respondent also discovered that after committing, in 2019, to excluding American customers of the platform, Binance has particularly kept the most active to enable considerable turnover for the site.
“When Binance launched, it did not have the proper instruments to compliance control for the company it was becoming”, was justified Binance in a message published on its site. The company has recognized what it calls “unfortunate decisions” and agreed “to take responsibility concerning this chapter” of its history not to say that it is dark.
According to the Wall Street Journal, an agreement has been reached between Binance and authorities American financial market regulators. And this agreement authorizes Changpeng Zhao to still remain a shareholder of Binance. Mr. Zhao is a Canadian citizen who was born in China. In the same agreement Binance made a commitment to American authorities to place themselves under surveillance, for a period of three years, of a external observer responsible for compliance, and to respect legal texts in force in this matter. Mr. Zhao also agrees to resign and plead guilty to somehow save the platform. This resignation signaled the end of a multi-year investigation into the largest cryptocurrency exchange in the world. The former CEO of Binance agreed to collaborate with justice to better manage the damage he caused to his business.
Changpeng Zhao was subsequently ordered to pay a personal fine of 50 million dollars and he could also spend 18 months in prison. This heavy sentence could be pronounced in February 2024. Changpeng Zhao has no ambition not create another start-up. He considers himself a lucky entrepreneur with only adventure, according to what he himself wrote. The now former number one of Binance suggests that it is possible to advise young entrepreneurs. “Worst case scenario, I could at least tell them what not to do. »
It was ultimately Richard Teng, the former head of the Abu Dhabi financial authority and current head of regional markets at Binance, who will replace Changpeng Zhao as position of CEO of the group. Mr. Zhao is therefore excluded from any Binance activity.
This is yet another very big blow to the cryptocurrency sector. There credibility of cryptocurrencies is once again called into question for a few months only after Sam Bankman-Fried, the founder of FTX, was recognized guilty of fraud and embezzlement of funds from clients of this exchange which went bankrupt. Of course the prices of the largest cryptocurrencies have plummeted upon the announcement of the resignation of Changpeng Zhao as well as the conviction of Binance by American justice. We will come back to this later.
