US prosecutors filed a sentencing memo on Feb. 16 asking a federal judge to sign off on the Binance plea deal, Bloomberg News reported.
In November 2023, Binance and its former CEO Changpeng Zhao (CZ) pled guilty to charges of money laundering and sanctions violations.
Deal justified
The plea deal entails Binance paying one of the largest criminal penalties in US history, amounting to $4.3 billion. The plea deal also requires that Binance be monitored for five years to ensure compliance with regulations.
Prosecutors said the historic penalty was justified, given that Binance intentionally violated laws and made the financial system vulnerable. Binance refused to register as a money service business and failed to implement safeguards against money laundering, the prosecutors said.
According to the prosecution, these actions left Binance and its customers “vulnerable to those who seek to exploit” the US financial system. The prosecutors added that the penalties are warranted, stating:
“Given the nature and seriousness of Binance’s misconduct — it was intentional and led by senior executives, with hundreds of millions of dollars of collateral consequences.”
Illicit financial flows
According to the Treasury Department’s November press release announcing the plea deal, Binance’s lapses allowed terrorist groups to transact on the platform. This includes Hamas’ Al-Qassam Brigades, Palestinian Islamic Jihad (PIJ), Al Qaeda, and the Islamic State of Iraq and Syria (ISIS).
The platform also facilitated transactions of websites devoted to selling child sexual abuse materials as well as hackers and scammers, according to the settlement.
CZ, who is currently on a $175 million bail, was scheduled for criminal sentencing later this month. However, a federal court recently postponed his sentencing to late April.
Zhao faces up to 10 years in prison but may receive no more than 18 months under the plea deal. He has also agreed to pay a $50 million fine.
