'Binance lapses boosted terrorists and hackers'

Binance Holdings Ltd. had such lax controls over cryptocurrency transactions on its exchange that terrorists, hackers and sanctions violators used it for years to move billions of dollars, US prosecutors said.

Binance and Chief Executive Officer Changpeng Zhao pleaded guilty to criminal charges Tuesday, admitting they failed to take basic anti-money laundering steps that are the bedrock of government efforts to check the flow of dirty money worldwide. Binance will pay $4.3 billion, while Zhao will step down as CEO and pay a $50 million fine.

The stunning turn of events means Zhao, the most powerful crypto figure in the world, faces prison time and will no longer run the industry's largest exchange. It comes after a multiyear investigation by federal prosecutors and the fraud conviction earlier this month of Sam Bankman-Fried, the disgraced founder of the collapsed FTX exchange.


Employees at Binance were engaged in a wide array of misconduct, and many were aware of the consequences of allowing millions of illegal transactions, according to the Justice Department and the Treasury Department's Financial Crimes Enforcement Network, or FinCEN.

"Binance turned a blind eye to its legal obligations in the pursuit of profit," Treasury Secretary Janet Yellen said in a statement. "Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform."