Binance and FinCEN Reach Monumental Agreement on Financial Allegations
The US Department of the Treasury and the Financial Crimes Enforcement Network (FinCEN), along with the Office of Foreign Assets Control (OFAC) and the Criminal Investigation Division of the IRS (CI), have concluded that Binance Holdings Ltd. and its subsidiaries bear responsibility for violating US laws regarding money laundering and sanctions that protect American national security and the integrity of the international financial system. Binance is the world’s largest cryptocurrency exchange, accounting for approximately 60% of centralized spot trading in virtual currency.
Among the accusations leveled against Binance are conducting financial operations for individuals involved in terrorism financing, extortion, dissemination of materials depicting sexual violence against children, darknet markets, fraud, and other illicit activities.
Binance has entered into a global agreement with FinCEN and OFAC regarding violations of the Bank Secrecy Act (BSA) and breaches of sanction restrictions. These breaches encompass the failure to implement programs to prevent and report suspicious transactions involving terrorists, including groups such as Hamas’s Al-Qassam Brigades, the Palestinian Islamic Jihad (PIJ), Al-Qaeda, the Islamic State of Iraq and Syria (ISIS), extortionists, money launderers, and other criminals. Additionally, the exchange facilitated transactions between users in the US and individuals in sanctioned jurisdictions such as Iran, North Korea, Syria, and the Crimean region of Ukraine. By not meeting its obligations to combat money laundering and sanctions, Binance allowed numerous unlawful entities to freely transact on its platform.
The global agreement with FinCEN entails a financial penalty of $3.4 billion, five years of oversight, and necessitates significant commitments to comply with requirements, including ensuring Binance’s complete exit from the United States.
The agreement with OFAC includes a fine of $968 million and requires Binance to adhere to several obligations regarding sanctions, including full cooperation with oversight supervised by FinCEN.
To ensure Binance complies with regulatory terms, including not offering services to US individuals and to counter unlawful activities, the Treasury Department will retain access to Binance’s accounting, records, and systems for five years through a monitoring system. Failure to meet these commitments may subject Binance to additional fines, including a deferred penalty of $150 million, to be imposed by FinCEN if Binance fails to comply with regulatory requirements and oversight.
This agreement stands as the largest in the history of the US Department of the Treasury and FinCEN.