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Binance, the world largest cryptocurrency exchange, will pay more than $4 billion in a plea deal with the U.S. government, FOX Business has confirmed.
Prosecutors said CEO Changpeng Zhao will plead guilty Tuesday in federal court in Seattle to violating U.S. law in a deal that resolves a years-long criminal investigation, the Wall Street Journal first reported.
Binance faces three criminal charges for violating US anti-money laundering law, one count of conspiracy and violating the International Emergency Economic Powers Act, court records show.
Zhao, who founded Binance in 2017 and guided it to a dominant position in cryptocurrency markets, will leave the company and plead guilty to causing a financial institution to violate the Bank Secrecy Act. He has agreed to pay a fine of $50 million, which will be credited to the sums paid to the Commodity Futures Trading Commission (CFTC), prosecutors said.
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Binance CEO Changpeng Zhao speaks during an interview in Tokyo, Japan, Thursday, Jan. 11, 2018. (Akio Kon/Bloomberg via Getty Images/Getty Images)
The plea agreement calls for Zhao's resignation as CEO and prohibits him from any current or future involvement in the operation or management of the cryptocurrency exchange.
Binance agreed to pay a criminal fine of $1.81 billion within 15 months of the sentencing. Prosecutors said the company also consented to a $2.51 billion forfeiture order.
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The company's former chief compliance officer, Samuel Lim, will also be charged as part of the deal, Reuters reported.
Changpeng Zhao, founder and CEO of Binance, attends the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles exhibition center in Paris, France on June 16, 2022. (REUTERS/Benoit Tessier/File photo/Reuters Photos)
Attorney General Merrick Garland and Treasury Secretary Janet Yellen are scheduled to appear at a Justice Department press conference at 3 p.m. ET to announce โcryptocurrency enforcement actions.โ
The second In June it filed a civil complaint against Binance and its founder, Zhao, accusing them of creating Binance.US as part of a "deception ring" to evade securities laws intended to protect American investors. That same month, Binance.US laid off about 50 employees, a source told Reuters at the time.
Justice Department prosecutors asked the company in December 2020 to provide internal records about its anti-money laundering efforts, along with communications involving Zhao, who founded the company in 2017.
The Binance Exchange website on a laptop organized in Dobbs Ferry, New York, on Saturday, February 20, 2021. (Getty/Getty Images)
In March, the CFTC filed civil charges against Binance, alleging that it failed to implement an effective anti-money laundering program to detect and prevent terrorist financing. Citing internal communications, the CFTC alleged that Binance officials and employees acknowledged that the platform had facilitated โpotentially illegal activities.โ
In February 2019, former Binance chief compliance officer Lim received information about transactions by the Palestinian militant group Hamas on Binance, the CFTC wrote.
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Binance has also seen a number of recent executive departures. His global head of product, Mayur Kamat, resigned in September and his chief strategy officer, Patrick Hillmann, left in July.
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The cryptocurrency giant and the broader industry have come under increased scrutiny from regulators after the collapse of Binance's former main rival FTX last November.
FOX Business' Susan Li, Breck Dumas and Reuters contributed to this report.
