Binance Guilty Plea, Exceeding $4.3 Billion, Approved By US Judge

The Binance probe unearthed instances where the exchange neglected to report over 100,000 suspicious transactions.

Changpeng Zhao, who has been out on a $175 million bond, had pleaded guilty in November to money laundering charges. ( Image Source :Getty )

United States judge Richard Jones late last week greenlit Binance's admission of guilt and a hefty penalty exceeding $4.3 billion for violating federal laws about anti-money laundering (AML) and sanctions. The penalties were imposed due to inadequacies in the internal controls of the world's largest cryptocurrency exchange.

Following the government's proposal for amendments to Binance founder Changpeng Zhao's bond, which was made just an hour prior, Judge Jones approved the plea. However, Zhao's legal team voiced objections to the proposed alterations.

Why Was Binance Under Scanner?

Binance's plea, disclosed last November, marked the conclusion of a prolonged investigation. The probe unearthed instances where the exchange neglected to report over 100,000 suspicious transactions, some of which were linked to designated terrorist groups like Hamas, al Qaeda, and ISIS. Additionally, prosecutors revealed that Binance facilitated the trade of illicit materials, including child sexual abuse content, and was a major recipient of ransomware proceeds.

Responding to the verdict, Binance released a statement acknowledging its accountability. The company asserted it has enhanced its AML and "know-your-customer" protocols and has made substantial strides towards implementing the requisite changes outlined in the plea agreement.

Changpeng Zhao, who has been out on a $175 million bond, had pleaded guilty in November to money laundering charges. As part of his plea deal, he agreed to pay a $50 million fine and step down from his role as Binance's chief executive.

Prosecutors filed a motion detailing changes to Zhao's bond conditions to comply with Judge Jones' directives. These conditions mandate Zhao to remain within the continental United States and under the supervision of court officers until his sentencing scheduled for April 30. Furthermore, Zhao must notify authorities three days in advance of any travel plans, surrender his passports, and maintain his current residence unless approved for relocation. Prosecutors also recommended the implementation of location monitoring for Zhao.

While discussions regarding these modifications had taken place between prosecutors and Zhao's legal team on multiple occasions, the latter objected to the motion as presented.

As of now, there has been no immediate response from Zhao's legal representatives regarding the latest developments.

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