The U.S. Treasury Department and the Justice Department announced on the 21st (local time) that Binance has agreed with the U.S. government to pay $4.3 billion in fines, admitting to violations of the Banking Security Act and the International Emergency Economic Rights Act. CEO Zhao Changfeng, who founded Binance, also resigned after admitting to violating the Banking Security Act.
According to the Bank Security Act, Binance had to register with the Financial Crime Control Network of the Ministry of Finance (FinCEN) and create a money laundering prevention device. But Binance ignored it. It did not report to financial authorities transactions with criminals including the militant group Al-Qasam Brigade of the Palestinian militant group Hamas, the Palestinian Islamic Jihad (PIJ), terrorist groups including the Islamic State in Iraq and Syria, drug dealers and child sex offenders.
Binance also linked U.S. customers to deal with users in sanctioned areas such as Iran, North Korea, and Syria. Regarding North Korea, it is said that it brokered 80 cryptocurrency transactions between U.S. customers and users in North Korea.
The Treasury Department said, “Binance did not take enough measures to block transactions between U.S. customers and sanctions targets,” adding, “As a result, a total of 1.66 million cryptocurrency transactions were made that violated sanctions.” “More broadly, it is a message to the entire cryptocurrency industry today and tomorrow,” Treasury Secretary Janet Yellen said at a press conference on the agreement with Binance fines. “If any institution wants to benefit from the U.S. financial system, it must follow the rules that keep us all safe from terrorists, foreign adversaries and crimes, or bear the consequences.”
