BlockBeats News, on November 22, Binance announced a resolution with the US Department of Justice (DOJ), the US Commodity Futures Trading Commission (CFTC), the Office of Foreign Assets Control (OFAC) of the US Department of the Treasury, and the Financial Crimes Enforcement Network (FinCEN) regarding historical registration, compliance, and sanctions issues. The resolution marks the company's recognition of past criminal compliance violations and indicates that it will use this as an opportunity to lay the foundation for the next 50 years of development.

Later, Binance founder CZ announced his resignation as CEO. The company has banned him from participating in its operations for three years from the date of his self-appointment as supervisor. Binance must strengthen its compliance plan and appoint an independent supervisor for a term of three years. After the plea agreement is concluded, the CEO and Chief Compliance Officer of Binance must demonstrate compliance with the terms of the plea agreement.

CZ stated in his tweet that although this decision is emotionally difficult, he must take responsibility for his past mistakes for the benefit of the community, Binance, and himself. He believes that Binance has a strong team and will continue to grow and optimize.

Total amount exceeds 4.3 billion US dollars, shared by four regulatory agencies

Binance will pay a fine of $1.8 billion and agree to pay within 15 months after the verdict. Another $2.5 billion in funds will be confiscated, some of which are related to transactions with US users and others related to transactions involving Iran, and will be paid at a specific time after the verdict. The total amount of the confiscation is $4.368 billion.

The settlement agreement with FinCEN imposes a civil penalty of $3.4 billion, implements a five-year period of supervision, and requires significant compliance commitments, including ensuring that Binance completely exits the US market. The settlement agreement with the US Department of the Treasury's Office of Foreign Assets Control (OFAC) imposes a fine of $968 million and requires Binance to comply with a series of strict sanctions compliance obligations, including full cooperation with supervision by FinCEN.

According to a report by Forbes journalist, the US Department of Justice (DOJ) and the US Commodity Futures Trading Commission (CFTC) will receive partial fines in the above two settlement agreements.

In the $3.4 billion settlement agreement with FinCEN, FinCEN will ultimately receive a $780 million fine and $1.5 billion in forfeited funds, while DOJ and OFTC will receive $2.47 billion.

In the $968 million settlement agreement with OFAC, OFAC will receive $70 million and DOJ will receive a fine of $898 million.

Regarding this, Binance co-founder He Yi told BlockBeats that "this is basically the number they (regulators) can afford to pay". Previously, He Yi emphasized in a tweet on X that US regulators did not accuse Binance of embezzling user funds or participating in market manipulation, and further stated that Binance will continue to strengthen compliance measures and continue to build and develop its platform.

CZ was fined $50 million, which will be deducted from the payment to the Commodity Futures Trading Commission (CFTC) if paid before the judgment date.

CZ pays the highest bail in history, with a sentence of up to 18 months

CZ appeared in the Federal Court in Seattle today. According to the plea agreement, CZ will admit to violating the Bank Secrecy Act (BSA) and other related laws, and CZ is prohibited from making any public statements that contradict his guilty plea or the facts of the case. CZ's bail amount will reach $175 million, one of the largest bail amounts in history. Binance founder and former CEO CZ has been released on a $175 million personal bond, and the sentencing hearing is scheduled for February 23, 2024 at 9:00 Pacific Time (February 24, 2024 at 1:00 Beijing Time).

At 10:00 today, GeekWire revealed a live photo of Binance founder CZ appearing in a Seattle court. BlockBeats previously reported on this.

According to Bloomberg, CZ faces a maximum of 10 years in prison, but under a plea agreement, his sentence is expected to be no more than 18 months. The US Department of Justice has not made a final decision on his length of imprisonment. Defense lawyers stated in court that the sentencing will be postponed for 6 months.

In a document released on Tuesday, Binance was charged with three counts, including violating anti-money laundering regulations, conspiring to conduct unlicensed money transfer business, and violating US sanctions. Binance will admit to operating an unlicensed remittance business, violating the BSA, and engaging in prohibited transactions with Iran. Binance agrees to acknowledge the facts stated in the plea agreement and promises to fully cooperate with the government.

Like CZ, Binance cannot make public statements that contradict the facts described in their respective responsibility or plea agreements.

The US Treasury Department stated that Binance's violations include failure to prevent and report suspicious transactions with terrorists, including Hamas, Palestinian Islamic Jihad, Al-Qaeda, and the Islamic State of Iraq and Syria. Court documents show that Binance allowed at least 1.1 million related transactions, totaling over $898 million, involving Iranian customers.

The US Attorney General, Merrick Garland, stated in a declaration: "The message should be clear: using new technology to break the law will not make you a disruptor, it will make you a criminal." The US Treasury Secretary, Janet Yellen, said: "Any institution, regardless of where it is located, that wants to benefit from the US financial system must comply with the rules that protect all of us from terrorist threats, foreign adversaries, and criminal harm, or face consequences."

According to an announcement by the US Department of the Treasury, as part of a settlement with the Financial Crimes Enforcement Network (FinCEN), Binance will "completely withdraw" from the United States and appoint a five-year monitor to oversee the exchange's sanctions compliance plan. During this period, the US Department of the Treasury will have access to Binance's records and systems. If Binance fails to fulfill these obligations, it may face additional significant fines, including a deferred penalty of $150 million. If Binance fails to comply with the required compliance commitments and regulatory terms, FinCEN will collect this fine.

However, Binance US is not affected and operates independently from the aforementioned Binance.

CZ Writes Open Letter in Response, Rich Teng Takes Over Binance

After the reconciliation news was announced this morning, CZ published a long open letter on X. In the letter, he stated that Binance has committed to improving its compliance and governance to ensure enhanced security, transparency, compliance, and future growth. Binance has always been dedicated to protecting user assets and security, and has made significant progress in organizational structure, system upgrades, and compliance standards. Importantly, the solution proposed by US institutions did not accuse Binance of embezzling user funds or market manipulation.

The new CEO will be replaced by Richard Teng, the former global regional market leader of the company. Richard Teng stated that his focus will be on: 1. Ensuring that users can trust the company's financial strength, security, and safety; 2. Collaborating with regulatory agencies to maintain high standards and promote innovation globally, while providing important consumer protection; 3. Collaborating with partners to promote the growth and adoption of Web3, which we will continue to adhere to.

CZ pointed out that Binance's new leadership team has a rich compliance background and will lead the company into the next growth phase. At the same time, Binance is committed to strengthening cooperation with law enforcement agencies, improving transparency, and laying the foundation for the long-term development of the cryptocurrency industry.

Related reading: "CZ Open Letter in Full: This is the Best Choice".

Binance's newly appointed CEO, Richard Teng, expressed his honor and humility in accepting this role. As the world's largest cryptocurrency trading platform with over 150 million users and thousands of employees, he will take everyone's trust seriously and cherish it. With the support of CZ and the leadership team, he has accepted this position with the goal of meeting and exceeding the expectations of all stakeholders and achieving the company's core mission of financial freedom.

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