Plea deal: Binance to pay $4.3bn for violating US anti-money laundering laws

A federal judge in the United States (US) approved a plea deal by Binance, requiring the cryptocurrency exchange to pay over $4.3 billion in fines and reparations.

Richard Jones, a US district judge, approved the plea deal at a sentencing hearing in Seattle on Friday.

The development comes after the company and Changpeng Zhao, its founder, pleaded guilty late last year to breaking anti-money laundering laws and violating sanctions, bringing an end to a long-running investigation by US prosecutors and regulators.

Binance acknowledged allowing transactions with Hamas and other terrorist organisations on the exchange.

In his judgement on Friday, the US district judge approved a plea agreement between Binance and federal prosecutors, ordering the company to pay a fine of $1.8 billion and forfeiture of $2.5 billion.

“This really is a case where the ethics of the company were compromised by greed,” he said. 

Meanwhile, the government, in its sentencing memorandum, said Binance “profited from the US financial system without playing by its rules and, as a result, criminals used the exchange to move hundreds of millions of dollars of stolen funds and illicit proceeds”.

Zhao, whose sentencing was postponed until April, relinquished his chief executive officer post at Binance and agreed to pay a $50 million fine as part of the plea agreement.

Binance, which handles cryptocurrency exchanges, has suffered significant losses since the crypto markets collapsed and officials began investigating the legality of its operations.

In June 2023, the Securities and Exchange Commission (SEC) in Nigeria had said the operation of Binance Nigeria Limited, a subsidiary of Binance, is illegal in the country.

In the most recent clampdown, reports suggest that the federal government has stopped the operations of cryptocurrency platforms including Binance. 

Bayo Onanuga, special adviser to President Bola Tinubu on information and strategy, had confirmed the restriction in a post on X on February 24, 2024.

Onanuga had also alleged on February 21, that the cryptocurrency platforms contribute to the manipulation of the foreign exchange (FX) market.

However, Binance Nigeria noted that it provides a market-driven peer-to-peer (P2P) platform that is not meant to be a proxy for currency pricing in Nigeria.

Binance also said Nigerian users can still access its platform.