The U.S. Department of Justice (DOJ) announced criminal charges against cryptocurrency exchange Binance on Tuesday. The charges allege the firm conspired to launder money and violated U.S. sanctions law.
The filings represent the culmination of a years-long federal investigation into the largest crypto trading platform globally in terms of volume. The charges specifically relate to Binance facilitating transactions on behalf of U.S. users from August 2017 through October 2022.
Among the key allegations outlined in the court documents:
- Binance and its executives, including founder and CEO Changpeng “CZ” Zhao, allegedly operated an unregistered cryptocurrency exchange and money-transmitting business in the U.S. deliberately to avoid regulatory oversight.
- By not registering with the Treasury Department as a money services business (MSB), Binance was able to process billions in crypto transactions without sufficient “know your customer” procedures or transaction monitoring controls required by U.S. law.
- This intentional lack of oversight allowed the exchange to process transactions involving illicit proceeds and transactions that violated U.S. sanctions programs targeting certain rogue regimes.
- In one example, the complaint says Binance processed over $700 million in Bitcoin transactions traceable to a sanctioned Chinese criminal organization.
- The DOJ says the exchange prioritized rapid growth and profits over legal compliance, becoming the largest crypto trading platform globally as a result.
Binance and CZ have yet to issue a public response to the criminal charges.
US government’s charges follow Binance CEO resignation
CZ has also stepped down as CEO, sending shockwaves across the whole cryptocurrency realm. CZ’s guilty plea is part of a sweeping $4.3 billion settlement deal. Binance will also pay $4.3 billion in total fines to settle civil and criminal allegations.
The fresh charges come during a turbulent year between federal regulators and the crypto industry.