Binance reaches a settlement with US regulators, paying a $4.3 billion fine

Recently, U.S. regulators made significant progress in their investigation of a well-known cryptocurrency trading platform. The platform has agreed to pay fines of up to $4.3 billion for multiple violations, setting a record for the largest fine in the history of the U.S. Treasury.

The U.S. Department of Justice held a press conference on November 21 local time to announce this significant news. Several senior officials attended, including the Attorney General, the Secretary of the Treasury, the Deputy Attorney General, and the Chairman of the Commodity Futures Trading Commission.

Contents and Reasons for the Heavy Fines

The trading platform faces three main accusations: violating anti-money laundering regulations, operating a funds transfer business without a license, and violating U.S. sanctions regulations. Among these, the anti-money laundering violation is the core issue.

According to the Ministry of Finance, the platform failed to effectively prevent and report suspicious transactions involving multiple terrorist organizations. Court documents show that the platform allowed at least 1.1 million transactions involving Iranian clients, totaling over $898 million.

The Minister of Finance harshly criticized the platform in a statement for "ignoring legal obligations in pursuit of profit," completing billions of dollars in transactions without conducting necessary customer due diligence and transaction monitoring. The Attorney General pointed out that the platform has become a breeding ground for global criminals to use cryptocurrency to transfer illegal funds.

Ultimately, the platform agreed to pay a $1.8 billion criminal fine and had $2.5 billion confiscated. Additionally, it must pay a total of $4.368 billion in fines to various departments of the Treasury.

Executive Changes and Future Arrangements

The founder and CEO of the platform agreed to resign and pay a $50 million fine, and may face up to 10 years in prison. However, his lawyer stated that the sentencing would be postponed for 6 months. The judge mentioned that as long as the final sentence does not exceed 18 months, the founder will waive the right to appeal.

The company announced the appointment of the former global head of regional markets as the new CEO. The new CEO has over 30 years of experience in financial services and regulation, having held executive positions in several important institutions.

The former CEO posted on social media, stating that although it is emotionally difficult to let go, he understands that this is the right choice. He admitted to making mistakes and is willing to take responsibility. Regarding future plans, he mentioned that he will take a break for a while and may then engage in some passive investments, becoming a minority shareholder in startups in the blockchain, Web3, and other fields.

Regulatory Results and Impact

It is worth noting that regulators have not accused the platform of misappropriating user funds or manipulating the market. This somewhat confirms the platform's previous commitment to user fund security.

As part of the settlement agreement, the platform will hire an independent compliance monitor for a term of three years and report compliance activities to the U.S. government. The former CEO is prohibited from participating in the company's operations and management for at least three years. Additionally, the U.S. Department of the Treasury will retain access to the company's books, records, and systems for five years.

The company will also "completely exit" the U.S. market, but its U.S. subsidiary will continue to operate in the U.S. as an independently registered entity. If these obligations are not fulfilled, the company may face an additional fine of $150 million.

This event undoubtedly has a significant impact on the global cryptocurrency industry, highlighting the importance of compliance. Industry insiders generally believe that this may prompt more trading platforms to strengthen their own regulations, pushing the industry towards a more standardized direction.