Binance Hit with Historic $4.3 Billion Penalty for Violating US Anti-Money Laundering Laws

In a groundbreaking decision, a US judge in Seattle has approved Binance’s guilty plea, imposing a record penalty of over $4.3 billion (approximately Rs 35,642 crore) for violating federal anti-money laundering and sanctions regulations. The ruling, a consequence of internal control failures at Binance, marks a significant moment for the cryptocurrency industry.

US District Judge Richard Jones gave the green light to the guilty plea, which includes a substantial $1.81 billion in criminal fines and an additional $2.51 billion in forfeiture. The approval came shortly after the government proposed adjustments to Binance founder Changpeng Zhao’s bond arrangements, a move contested by Zhao’s legal team.

Binance’s admission of guilt, declared in November, concludes a lengthy investigation revealing the exchange’s failure to report more than 100,000 suspicious transactions, some involving designated terrorist groups like Hamas, al Qaeda, and ISIS. Prosecutors also disclosed Binance’s role in facilitating the trade of child sexual abuse materials and its receipt of ransomware proceeds.

In response to the ruling, Binance expressed acceptance of responsibility and outlined ongoing efforts to strengthen its anti-money laundering and “know-your-customer” protocols. The exchange claimed substantial progress towards fulfilling the terms of its plea agreement.

Meanwhile, Changpeng Zhao, who has been on a $175 million bond since his guilty plea, faces a $50 million fine and must step down as Binance CEO. Prosecutors recommended modifications to Zhao’s bond conditions, aligning with Judge Jones’ directives for Zhao to remain within the continental US and under court supervision until his sentencing on April 30.

The proposed changes include Zhao providing advance notice of travel plans, surrendering passports, and maintaining his current residence unless approved otherwise. Pretrial services officers have also recommended location monitoring for Zhao.

While discussions between prosecutors and Zhao’s legal team have occurred, objections have been raised to the proposed modifications.

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