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U.S. Prosecutors wants to monitor Binance, CZ faces potential 18-month sentence

Published

9 months ago

February 18, 2024

U.S. prosecutors have submitted a request to be permitted to monitor Binance for at least five years. This follows the legal battle the largest exchange in the world has been facing with the SEC since last year.

Binance’s former CEO, Changpeng Zhao (CZ), is expected to receive a sentence of up to 18 months following Binance’s admission of violating U.S. anti-money laundering and sanctions regulations, resulting in a $4.3 billion fine.

As part of the plea deal, CZ resigned as Binance’s chief executive. The SEC filed a lawsuit against Binance and CZ, accusing them of violating U.S. federal securities laws and operating an unregistered exchange.

Binance has grappled with legal challenges, including allegations of money laundering and ties to China.

In November 2023, Binance and CZ pleaded guilty to felony charges related to the Bank Secrecy Act, failure to register as a money services business, and lacking an effective anti-money laundering program.

According to the prosecutors, Binance deliberately violated economic sanctions laws, exposing the financial system to exploitation, justifying the substantial penalty.

They added the plea deal, which mandates five years of monitoring will help previous intentional misconduct led by senior executives.

Additionally, Binance was found to have failed by refusing to register as a money services business and the absence of an effective anti-money laundering program left the platform, its customers, and the U.S. financial system vulnerable.

The company also openly admitted to facilitating transactions with Hamas and other terrorist groups.

In the midst of this, Richard Teng succeeded Changpeng Zhao as the CEO of Binance. Teng is an experienced executive with over three decades of financial services and regulatory experience.

He joined Binance in August 2021 as CEO of Binance Singapore and subsequently held roles overseeing the MENA region, the European region, and all regions outside of the U.S. as the Head of Regional Markets at Binance.