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    Binance CEO Sentenced For Four Months In United States For Inadequate Anti-Money Laundering Protections: Report

    Changpeng Zhao, the founder of cryptocurrency exchange Binance, has been sentenced to four months in prison by a US court. According to a report from The Verge, The sentence was handed down for failing to adequately safeguard against money-laundering and comes after Zhao pleaded guilty in November last year.

    Binance was under investigation for violations of the Bank Secrecy Act (BSA), the International Emergency Economic Powers Act (IEEPA), and for failure to register as a money-transmitting business with the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). 

    The prosecutors had initially asked for a sentence of 3 years, which they felt reflected the gravity of his crime. The prosecution’s sentencing memo stressed Zhao’s deliberate decision to ignore anti-money laundering requirements and attempts to deceive regulators. “Despite knowing Binance was required to comply with U.S. law, Zhao chose not to register the company with U.S. regulators; he chose not to comply with fundamental U.S. anti-money-laundering (AML) requirements; he chose not to implement and maintain an effective know-your-customer (KYC) system, which prevented effective transaction monitoring and allowed suspicious and criminal users to transact through Binance; and even when Binance employees detected suspicious transactions, Zhao’s choices meant those transactions were not reported to U.S. authorities,” the prosecutors remarked. Furthermore, the exchange also undermined US sanctions against Iran by allowing Iranian users to transact with Americans, actions which allegedly “damaged U.S. national security and endangered the integrity of the international financial system”.

    Zhao’s lawyers instead asked for probation over jail time, describing him as a “first-time, non-violent offender who committed an offense with no intention to harm anyone. He presents no risk of recidivism. He has appeared in this country voluntarily to accept responsibility,” in their own sentencing memo. It was also argued that he would face harsher conditions as a non-citizen. 

    The sentencing has been due since November 21st last year, when the US government and the cryptocurrency behemoth reached a settlement, concluding a long-drawn federal investigation. As per the settlement, Binance would pay a fine of $4.3 billion, Zhao would resign and the company would appoint an independent compliance monitor for three years.

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    The post Binance CEO Sentenced For Four Months In United States For Inadequate Anti-Money Laundering Protections: Report appeared first on MediaNama.

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