World's Largest Cryptocurrency Exchange CEO Likely to Admit Guilt in Money Laundering Case

Billionaire Changpeng Zhao, CEO of the world's largest cryptocurrency exchange, Binance, is reportedly set to plead guilty to money laundering violations in a settlement with the US government. This is aimed at alleviating the legal scrutiny against the company. It is also anticipated that Binance will plead guilty to the charges.

As part of the agreement, Binance has agreed to pay $4.3 billion in fines and other penalties.

Zhao, the creator and CEO of Binance, has accumulated a wealth estimated by Bloomberg to be over $23 billion.

The news of the agreement, previously reported by The Wall Street Journal, coincides with US officials announcing their intention to reveal a "significant illicit financial enforcement action" related to cryptocurrencies later on Tuesday. This announcement will be made at an event attended by Attorney General Merrick Garland and Treasury Secretary Janet Yellen.

The Treasury and Binance declined to provide comments or respond to requests for comment respectively.

On Tuesday, federal prosecutors revealed court records accusing Zhao-led Binance of intentionally not registering as a money service business, violating the Bank Secrecy Act by failing to establish and uphold an effective anti-money laundering program, and deliberately causing breaches of US economic sanctions.

The charges against Binance in the US District Court for the Western District of Washington accuse the company of intentionally profiting from the US market without following required US laws. Prosecutors claim this misconduct began as early as August 2017 and continued until at least October 2022, involving specific Binance officials and personnel.

What is Binance?

Founded in 2017 by Canadian national Zhao, Binance has faced civil cases from US market regulators this year. They accuse the company of operating an illegal exchange for unregistered securities in the United States. In June, the Securities and Exchange Commission sued Binance, alleging "extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law."

Binance has consistently maintained that it is not bound by US laws due to the absence of a physical headquarters in the United States. The SEC has also accused Zhao and Binance of mingling customer assets and redirecting some to an entity controlled by Zhao.

According to a complaint filed by the Commodity Futures Trading Commission, Zhao asserts that the company's headquarters are wherever he is at any given time, as part of a deliberate strategy to escape regulation. The agency has accused Binance and Zhao of breaking US derivatives trading laws, including allegedly providing secret guidance to "VIP" customers in the US on avoiding compliance controls. In response to the SEC's allegations, a Binance spokesperson stated in June that the company takes them seriously but finds the accusations unjustified.

Binance released a statement stating their respectful disagreement with the SEC's allegations of operating as an unregistered securities exchange or illegally offering and selling securities. The company pointed out that its size and global recognition have made it an easy target caught in the crossfire of US regulatory issues. This is a developing story and will be updated.