The government says Binance agreed to look back and report suspicious transactions it had not reported to FinCEN.
Cryptocurrency exchange Binance “intentionally failed” to report to regulators more than 100,000 transactions on its platform linked to illicit activities such as the darknet, scams, fraud and other malicious activities.
In a press release published on November 21, the US Treasury said that Binance also failed to implement an effective anti-money laundering program and did not comply with know-your-customer (KYC) regulations, required by law. of the US, in a “large number of its users.”
“This meant that Binance allowed a variety of illicit actors to transact freely on the platform, damaging the integrity of the financial system.”
US Department of the Treasury
Additionally, the Treasury noted that Binance also failed to mitigate risks related to “anonymity-enhanced cryptocurrencies,” allowing its users to “hide information about the origin and destination of transactions.” The government also revealed that Binance’s former chief compliance officer told staff that Binance founder and former CEO Changpeng Zhao adopted a separate policy to “not report such activity.”
In early 2022, Reuters published a special report noting that Binance “acted contrary to the assessment of its own compliance department” by offering services to clients in countries, including Russia and Ukraine, considered “extreme” risk of money laundering.
At the time, Reuters also revealed that Binance’s former chief compliance officer, Samuel Lim, expressed concerns about the weak KYC system. Former Binance executives reportedly warned Zhao about issues with KYC, but the Binance founder ignored them.
Reuters has repeatedly targeted Binance and its former CEO through 2022 with a series of special reports, shedding light on the exchange’s close relationship with Russia’s state security service, as well as its plan to bypass US regulators. .and the United Kingdom.
Zhao consistently denied the allegations and said journalists were “inaccurate” as they “ignore facts, take words out of context, reuse ‘news’ from three years ago (that was/are inaccurate).”
On November 21, 2023, Binance’s Zhao resigned as CEO and pleaded guilty to violating US anti-money laundering requirements, writing in X that he had “made mistakes” and now “must take responsibility.”
