In a sweeping regulatory crackdown, cryptocurrency exchange Binance has agreed to pay a total of $8.7 billion in settlements to various U.S. regulatory bodies and will cease operations in the United States market. The settlements include $3.4 billion to the Financial Crimes Enforcement Network (FinCEN), $968 million to the Office of Foreign Assets Control (OFAC), and a significant $4.3 billion agreement with the Department of Justice (DOJ).
The actions by Binance, which have led to these penalties, involve breaches of the Bank Secrecy Act, violations of sanctions programs, and inadequate adherence to know-your-customer practices. These lapses allowed sanctioned entities and cybercriminals to utilize the platform for illicit activities, posing risks to the integrity of the U.S. financial system.
As part of the settlement agreements announced today, Binance will appoint a compliance monitor for five years and its CEO Changpeng Zhao will step down from his position. Despite this major shift for Binance, its U.S.-based affiliate Binance.US, operated by BAM Trading Services and registered as a money services business, will not be impacted by the parent company's exit from the U.S. market.
Treasury Secretary Janet Yellen highlighted the gravity of this enforcement action, stating that it is unprecedented in nature and underscores the commitment of U.S. regulators to hold financial institutions accountable. She emphasized that cryptocurrency exchanges must operate within regulatory frameworks that safeguard national security interests and contribute positively to the financial system.
The investigations into Binance's operations were conducted by FinCEN, OFAC, and the IRS Criminal Investigation division. They revealed intentional efforts by Binance to obstruct law enforcement inquiries and a lack of risk-based procedures for certain product offerings.
Secretary Yellen's announcement underscored that these landmark penalties serve as a stark reminder to all crypto exchanges operating within or targeting U.S. consumers: adhere strictly to regulatory norms or face decisive government action aimed at curtailing practices detrimental to national security and financial stability.
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