U.S. Government Announces $4.3 Billion Resolution with Binance, CZ Enters Plea Deal

In a significant development, officials from the United States Department of Justice, Treasury, and CFTC revealed a comprehensive settlement totaling $4.3 billion with Binance and its CEO Changpeng “CZ” Zhao. The resolution includes a plea deal in which CZ will plead guilty to one felony charge, addressing both criminal and civil cases against the cryptocurrency exchange.

During a press conference on November 21, Attorney General Merrick Garland disclosed that CZ personally entered his plea in a U.S. federal court, despite residing outside the country. The $4.3-billion settlement encompasses “civil regulatory enforcement actions” by various government departments, including the U.S. Treasury and the Commodity Futures Trading Commission (CFTC).

Garland asserted that Binance’s policies lacked fundamental safeguards, allowing criminals engaged in illicit activities to channel “stolen funds” through the exchange. He accused the exchange of feigning compliance with U.S. federal laws by providing pathways for certain users linked to illicit funds. As part of the settlement, Binance is subject to monitoring, reporting requirements, and mandated to file suspicious activity reports for past transactions.

Treasury Secretary Janet Yellen detailed the penalties, revealing that Binance would pay over $3.4 billion to the Financial Crimes Enforcement Network and approximately $1 billion to the Treasury’s Office of Foreign Assets Control. CFTC Chair Rostin Behnam outlined that Binance would settle with $2.7 billion in civil monetary penalties and disgorgement, CZ with $150 million, and former compliance chief Samuel Lin with $1.5 million. The Justice Department would credit around $1.8 billion towards these resolutions.

In response to the settlement, Binance released a blog post on November 21 expressing contentment in reaching a resolution with U.S. authorities, asserting the exchange’s unwavering commitment to user security and safety.

CZ, in an announcement on X, disclosed his resignation as CEO, with Binance’s global head of regional markets, Richard Teng, set to assume the position. CZ acknowledged his mistakes, emphasizing responsibility for the benefit of the community, Binance, and himself. Notably, he highlighted that the allegations did not include misappropriation of user funds or market manipulation by Binance.

The indictment against CZ, filed under seal on November 14, outlined a charge related to the failure to maintain an effective Anti-Money Laundering program at the crypto exchange, thereby violating the Bank Secrecy Act. Court records, initially sealed from November 14 to 21, revealed charges against Binance and CZ in collaboration with both prosecutors and the parties involved.

While this settlement marks the resolution of many civil and criminal investigations into Binance, the exchange still faces an ongoing civil case with the U.S. Securities and Exchange Commission (SEC), filed in June, which accuses Binance, Binance.US, and CZ of securities law violations.