US prosecutors allege that Binance Holdings Ltd. has maintained lax controls on cryptocurrency exchanges, allowing terrorist organizations, hackers and sanctions violators to trade billions of dollars over the years, according to Bloomberg today. November 23.
Binance and CEO Changpeng Zhao (CZ) admitted to criminal charges on November 22 for failing to implement basic anti-money laundering measures that are the foundation of money control efforts. global dirt from the US government. Binance must pay a fine of 4.3 billion USD, while CZ will have to resign as CEO and pay a fine of 50 million USD.
The case may progress with many unexpected details, when CZ may face a prison sentence. According to the US Department of Justice and the Financial Crimes Enforcement Agency (FinCEN), employees at Binance also engaged in a range of misconduct, many of whom were aware of the consequences of allowing millions of illegal transactions. dharma takes place.
Treasury Secretary, Janet Yellen strongly criticized that, “Binance has turned a blind eye to its legal obligations, allowing money to flow into the hands of terrorists, cybercriminals, and child abusers.” through their platforms , in pursuit of profit . ”
Specifically, Binance has allowed al-Qassam Brigades, the military wing of Hamas, to use Bitcoin transactions to donate to the Palestinian war. According to FinCEN, Hamas is considered a terrorist organization by the US, and Binance did not submit a suspicious activity report to the US regarding Hamas's fundraising. Notably, Binance also allows Bitcoin donation transactions from other terrorist organizations such as al-Qaeda and ISIS.
In addition, Binance admitted to allowing a series of illegal transactions by people living in Iran, Cuba, Syria and the Crimea, Donetsk and Luhansk regions of Ukraine, violating US sanctions. Binance was also implicated in transactions from the world's largest darknet market, Hydra Market, where US and German authorities confiscated servers in 2022.
Binance also processed tens of millions of dollars in transactions related to ransomware hacker groups, such as SamSam, Satan and WannaCry. FinCEN specifically condemned that, “although Binance worked with law enforcement, it failed to disclose important information from those attacks.” In 2021, the US indicted three North Korean military hackers for the WannaCry attack.
Finally, FinCEN accused Binance of being involved in more than 1000 transactions with marketplaces dealing in child pornography and other related materials. The administrator of one of the websites, Dark Scandals, was indicted in 2020. The website also contained other violent rape videos.
The Binance scandal marks a new chapter in the history of the cryptocurrency market, with potentially major consequences both legally and financially.