After the US authorities launched an inquiry, the founder of Binance, the biggest cryptocurrency exchange in the world, acknowledged that he had not taken the necessary precautions to stop money laundering, and the business agreed to pay more than $4 billion.
In a federal Seattle court, Chief Executive Changpeng Zhao entered a guilty plea to one count of failing to maintain an effective anti-money-laundering program. An LLC with limited liability based in the Cayman Islands is Binance.
According to a source, the plea was made as the business consented to pay the US government more than $4 billion as part of a deal.
The accusation resembled the kinds of activities that were discovered following the demise of FTX, the second-biggest Bitcoin exchange, a year ago.
Zhao’s sentencing was scheduled for February 23rd by the judge, but it is expected to be postponed because all parties had previously agreed that there would be no punishment for at least six months.
Allegations have previously been made against Zhao for allegedly misappropriating client cash and hiding the fact that the business was transferring billions of dollars worth of investor assets to a company he owned.
It happened months after regulators accused the business in a lawsuit of functioning as an unregistered securities exchange and breaking many US securities laws.
Market crashes and scandals have plagued the bitcoin sector. The 31-year-old creator of the defunct cryptocurrency brokerage FTX, Sam Bankman-Fried, was found guilty of fraud earlier this month after he stole at least $10 billion from clients and investors.
Zhao was most renowned for being Bankman-Fried’s main opponent.
When Bankman-Fried first opened the exchange in 2019, the two were cordial competitors in the market. However, as their relationship soured, Zhao announced in early November 2022 that he was selling all of his Bitcoin holdings in FTX. A week later, FTX filed for bankruptcy.
Bankman-Fried attempted to place the blame for the purported bank run at FTX on Binance and Zhao both during this trial and in subsequent public statements.
In October, a jury found Bankman-Fried guilty of wire fraud as well as multiple other charges. He might spend decades behind bars when he is sentenced in March.