Crypto exchange to pay over $4B after founder pleads guilty to felony

Binance Founder and CEO Changpeng Zhao pleaded guilty on Tuesday to federal charges related to failing to implement safeguards against money laundering. Court documents made public on Tuesday show Zhao and Binance officials evaded laws prohibiting the company from doing business with customers in countries economically sanctioned by America, such as Iran, Cuba, and Syria. Binance, the largest cryptocurrency exchange in the world, agreed to pay over $4 billion to settle the government’s charge. According to the terms of his plea agreement, Zhao must pay a $50 million personal fine and resign as CEO. Zhao is also barred from participating in Binance’s business until three years after he is provided with a court-appointed monitor. Zhao’s full sentencing is scheduled for Feb. 23, 2024.

What’s with the government cracking down on crypto companies? Zhao’s plea comes less than a month after fellow crypto giant and FTX founder Sam Bankman-Fried was criminally convicted of fraud earlier. The U.S. Securities and Exchange Commission charged crypto platform Coinbase in June for operating unregistered security exchanges. The SEC most recently filed similar charges against crypto platform Kraken on Monday.

Dig deeper: Read Todd Vician’s report on a federal government experiment testing the viability of cryptocurrency.