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Court Orders Binance and CZ to Pay $2.7 Billion for Alleged Money Laundering

Binance, one of the world’s largest cryptocurrency exchanges, and its CEO Changpeng Zhao, commonly known as CZ, have been ordered by a US court to pay a substantial $2.7 billion fine. 

This ruling comes as a result of the charges brought forward by the US Commodity Futures Trading Commission (CFTC), which accused Binance and CZ of involvement in money laundering activities. 

Binance Hit With Multi-Billion Dollar Penalties

Binance, the world’s largest crypto exchange, along with its CEO Changpeng Zhao, also known as CZ, have been ordered to pay substantial fines totaling $2.7 billion.

This decision, as reported by Reuters, comes in the wake of allegations that Binance violated US anti-money laundering (AML) and sanctions laws and neglected to report suspicious transactions.

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The US District Court for the Northern District of Illinois has ratified this settlement through a consent order that includes a permanent injunction, civil monetary penalty, and other equitable reliefs. As per the terms of the settlement, Zhao is required to pay a civil monetary penalty of $150 million. 

Simultaneously, Binance is mandated to forfeit $1.35 billion in transaction fees deemed illicit and to additionally pay a penalty of $1.35 billion to the US Commodity Futures Trading Commission (CFTC).

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Exchange Accused Of Enabling Terrorist Transactions

The CFTC’s allegations against Binance are grave, asserting that the exchange facilitated over 100,000 transactions suspected to be linked to terrorist organizations, as classified by the United States.

Adding to the severity, Binance is also accused of failing to report transactions connected to websites involved in distributing child sexual abuse material. Furthermore, the exchange has been identified as a significant receiver of proceeds from ransomware attacks.

These allegations culminated in November when CZ, resigned from his position as CEO of Binance. His resignation followed his guilty plea to charges of violating US anti-money laundering regulations. This plea was part of a broader settlement, concluding an extensive investigation into the operations of Binance. 

In the wake of these developments, Binance has acknowledged its past failures in compliance. The exchange has committed to improving its practices and ensuring adherence to regulatory standards, marking a new chapter in its approach to legal and ethical responsibilities in the digital currency landscape.

Regulatory Crackdown on Cryptocurrency: Binance Faces Hefty Fines

The recent court decision to levy substantial fines on Binance and its former CEO, CZ, marks a significant moment in the ongoing efforts by regulators to enforce anti-money laundering (AML) regulations within the cryptocurrency industry. This action underscores the seriousness with which regulatory bodies are addressing compliance issues in this rapidly evolving sector.

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With the appointment of Richard Teng as the new CEO, Binance is poised to fully adhere to the court’s orders and any additional penalties imposed by regulatory authorities. Teng’s leadership is expected to steer the company towards a more compliance-focused direction. 

Binance is demonstrating a commitment to fostering a culture that prioritizes adherence to legal standards, aiming to restore trust and forge a renewed relationship with US regulators. 


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Donald Haymatter

Donald Haymatter is an expert broker with 15+ years of experience. He stays up-to-date with the latest financial news and trends to help clients make informed investment decisions. Donald is known for his analytical approach and personalized investment advice. Outside of work, he enjoys reading and mentoring young professionals.

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