Did you know that the world-renowned cryptocurrency exchange, Binance, is making a complete withdrawal from the U.S market? This move is part of a settlement with the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Asset Control (OFAC), the two financial watchdogs of the U.S. Treasury Department. The settlement also includes billions in fines and a five-year monitoring period.
Details of the Settlement
The Binance settlement with FinCEN and OFAC comes after both agencies accused the cryptocurrency exchange of violating the Bank Secrecy Act and various sanctions programs. As part of the settlement, Binance is expected to pay a whopping $3.4 billion to FinCEN and $968 million to OFAC. This comes on top of the $4.3 billion in fines and forfeitures that Binance had already agreed to pay to the U.S. Department of Justice for similar violations.
Additionally, Binance has agreed to exit the U.S. market completely and appoint a monitor for five years. This monitor will oversee the exchange’s compliance with sanctions, and the U.S. Treasury Department will have access to Binance’s records and systems during this period.
The Significance of the Settlement
A senior Treasury official has labeled this as the largest settlement in the department’s history. The official emphasized the unprecedented nature of this monitorship, stating that the aim is not just to penalize the wrongdoings but also to ensure Binance’s complete exit from the U.S.
It’s worth noting that Binance.US, the U.S. affiliate for Binance operating under the name BAM Trading Services, is not affected by this exit. As a registered money services business, it is separate from Binance and therefore remains unaffected by the latter’s departure.
The Accusations Against Binance
The agencies accused Binance of allowing individuals associated with sanctioned entities, such as Hamas and the Islamic State of Iraq and Syria, as well as people in North Korea and other sanctioned jurisdictions, to use its platform. This also included money launderers and malicious cybersecurity actors. The agencies stated that Binance’s failure to comply with Anti-Money Laundering (AML) and sanctions obligations enabled these illicit actors to transact freely on the platform.
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