Binance CEO Steps Down, Crypto Company Charged With Record $4.3B In Damages
OAN’s James Meyers
2:51 PM – Tuesday, November 21, 2023
The CEO of the world’s largest cryptocurrency exchange is officially stepping down, in hopes of allowing the company’s operation to continue.
It was announced on Tuesday that Binance CEO Changpeng Zhao stepped down from his role and pleaded guilty to violations of the Bank Secrecy Act, which is an anti-money laundering law, among other charges.
The cryptocurrency exchange company will pay over $4.3 billion to settle the charges, which makes it the largest penalty in the history of the Treasury Department.
According to Treasury Secretary Janet Yellen, Binance was guilty of “consistent and egregious violations of U.S. anti-money laundering and sanctions laws.”
The Justice Department (DOJ) also confirmed the move, announcing that Zhao has pleaded guilty to maintaining an effective anti-money laundering program and that he has stepped down as CEO.
“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed — now it is paying one of the largest corporate penalties in U.S. history,” Attorney General Merrick B. Garland said in the news release.
However, Zhao said that he would remain a shareholder of the company and would still be able to “talk to leadership.”
Additionally, the Treasury Department claimed that Binance “willfully failed to report more than 100,000 suspicious transactions from a host of sanctioned groups, including Hamas’ military arm, Qassam Brigades, Al Qaeda, the Islamic State terrorist group, a litany of criminal ransomware hackers, and users in countries facing U.S. sanctions, including North Korea and Iran.”
The Treasury Department said that Binance refrained from reporting transactions with websites that were reportedly selling materials related to child sexual abuse.
Meanwhile, other large cryptocurrency exchange companies have similarly been fighting lawsuits and had legal action taken against them as well. For example, Binance’s biggest rival, FTX, with FTX founder Sam Bankman-Fried being found guilty of fraud.
On Monday, the Securities and Exchange commission charged crypto company Kraken with “failing to register its services with the agency,” which is required by securities law.
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How does Binance’s failure to report suspicious transactions, including those involving terrorist groups and countries facing U.S. sanctions, impact anti-money laundering and sanctions laws?
Issued a notice of charges against Coinbase, another major cryptocurrency exchange, accusing the company of misleading investors. These recent developments underscore the increasing scrutiny and regulatory pressure facing the cryptocurrency industry.
The charges against Binance are particularly damning, as they involve violations of anti-money laundering laws and sanctions. The company allegedly failed to report suspicious transactions, including those involving terrorist groups and countries facing U.S. sanctions. Additionally, Binance neglected to report transactions related to child sexual abuse.
The penalties imposed on Binance are unprecedented, with the company agreeing to pay over $4.3 billion to settle the charges. This massive fine is the largest in the history of the Treasury Department and sends a strong message to other cryptocurrency exchanges about the importance of compliance with financial regulations.
Treasury Secretary Janet Yellen condemned Binance for its “consistent and egregious violations” of anti-money laundering and sanctions laws. Attorney General Merrick B. Garland emphasized that Binance’s success was built on criminal activities, and the company is now facing the consequences of its actions.
In response to the charges, Binance CEO Changpeng Zhao has stepped down from his role. In a tweet, he acknowledged his mistakes and stated that stepping down was the right thing to do for the community, the company, and himself. Zhao will remain a shareholder of Binance, but he will no longer hold the position of CEO.
These developments highlight the urgent need for stricter regulation and oversight of the cryptocurrency industry. As cryptocurrencies gain more mainstream adoption and become increasingly intertwined with traditional financial systems, it is crucial to ensure that they operate within the boundaries of the law. The actions taken against Binance and other cryptocurrency exchanges serve as a wake-up call and a reminder that no entity is above the law.
Furthermore, these incidents underscore the importance of investor protection and transparency in the cryptocurrency market. With the volatility and risk associated with cryptocurrencies, it is vital for investors to have access to accurate and reliable information. The charges against Coinbase for misleading investors demonstrate the need for greater accountability and adherence to reporting standards within the industry.
In conclusion, the recent charges and penalties imposed on Binance, as well as the allegations against other cryptocurrency exchanges, highlight the challenges and risks facing the cryptocurrency industry. It is imperative for regulatory authorities to strengthen oversight and enforcement efforts to protect investors and maintain the integrity of the financial system. Likewise, cryptocurrency exchanges must prioritize compliance with anti-money laundering and sanctions laws to restore trust in the industry. Only through responsible and transparent actions can the cryptocurrency industry mature and establish itself as a legitimate and sustainable part of the global economy.
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