Regulation crypto: federal judge approves $4.3 billion settlement for Binance

Last Friday, a judge in Seattle approved the $4.3 billion settlement between US law enforcement agencies and the crypto exchange Binance, after the latter admitted to violating some federal laws regarding the regulation of digital assets.

Now Changpeng Zhao, former CEO of the world’s largest crypto exchange platform, is awaiting his sentence scheduled for April 30: he faces up to 10 years in prison.
All the details below.

The judge confirms Binance’s $4.3 billion settlement for violating US cryptocurrency regulations

Last November, the Department of Justice (DOJ) of the United States reached an agreement with the crypto exchange Binance after it had previously been accused of violating several federal laws regarding the regulation of digital assets.

Now, months after the incident, a judge in Seattle has reviewed the situation and signed the anticipated settlement, which sees Binance paying a huge fine of 4.3 billion dollars.

According to what was reported by Bloomberg, on Friday, February 23, Judge Richard Jones of the United States District Court for the Western District of Washington would have approved the fine without confirming any additional checks for the crypto exchange.

In a separate statement, a spokesperson for Binance explained that the exchange admits its responsibility in the matter, while waiting to finally resolve the dispute with the DOJ and various US federal agencies.

The public prosecutors had accused the platform and its former CEO Changpeng Zhao of violating the current regulations on crypto assets, for 13 different offenses.

On the plate there is evidence of Binance’s evident lack of implementing an efficient anti-money laundering program, having voluntarily omitted some control practices such as the KYC procedure.

Furthermore, the platform would have allowed the buying and selling of securities such as BNB and other cryptocurrencies to its customers, as well as facilitating illicit transactions and mixing the company’s assets with those of its customers.

Finally, the company would never have filed a report of suspicious activity 

to regulatory authorities, further highlighting their guilt.

Here is what a spokesperson for the exchange reported about the incident:

“We are gratified by the recognition we have received from regulatory authorities regarding our cooperation and significant improvement in compliance,” the note reads. “We look forward to continuing in the coming months to advance our efforts to set the industry standard in terms of compliance, security, and transparency.”

Before Judge Jones confirmed the plea deal, in a condemnation note prosecutors had pointed out that the signed agreement “reflects the nature and circumstances” of the conduct carried out by Binance.

The current situation at Binance: judgment looming for Changpeng Zhao

After signing the plea agreement with the DOJ and the remaining regulatory authorities of the country, the situation at Binance seems to have clearly changed, with the crypto exchange now fully compliant with US federal laws.

It is important to remember that the accusations described in the previous paragraph referred to actions and behaviors carried out by Binance in the past years, more precisely from 2018 until 2022.

In recent years, the platform has instead committed to improving its compliance with  the KYC (know-your-customer) practice  and anti-money laundering regulations.

The world’s largest exchange in terms of trading volumes now wants to clean up its reputation, and is trying to do so by paying a hefty fine and implementing impeccable conduct in compliance with current regulations on digital assets.

Meanwhile Chanpeng Zhao, also known by the acronym CZ, is awaiting his trial that will see him either acquitted or charged in front of the accusations.

In November, while the DOJ was cracking down on crypto exchanges, CZ resigned to make room for Richard Teng, Global Head of Binance Regional Markets and a trusted figure within the company.

The former CEO of Binance had pleaded guilty to violating the Bank Secrecy Act, stepping down from managing the platform but at the same time retaining ownership with the majority of the company’s shares.

After the accusation, CZ remained free by paying a bail of 175 million dollars, but now he could end up in jail for several years if the judges were to indict him.

In detail, in the hearing expected for April 30, the Chinese billionaire naturalized Canadian risks a prison sentence of 18 months according to federal guidelines, which could however reach up to 10 years if prosecutors allow it.

In the last few months, he has never obtained permission to leave the United States, having been “invited” by the federal authorities to remain in the country until his sentence is completed.