Binance CEO Changpeng Zhao has stepped down and admitted guilt in violating US anti-money laundering laws as part of a historic $4.3 billion settlement, according to statements from prosecutors on Tuesday. In response, Minister of State for Electronics and Information Technology Rajeev Chandrasekhar expressed concerns about the misuse of new technology for illegal purposes, citing the recent developments around Binance and FTX on X (formerly Twitter).
Chandrasekhar quoted US Attorney General Merrick Garland, who referred to the Binance settlement as one of the largest corporate penalties in US history.
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The minister praised the Narendra Modi government’s handling of crypto speculations, stating that the central approach “saved countless Indians from crypto meltdown and losses.”
Lesson to be learnt from Binance, FTX and other “crypto” companies
“Using new technology to break the law does not make you a disrupter. It makes you a criminal,”
PM @narendramodi ji govts approach since 2022 to deterring crypto speculation has saved countless Indians from… https://t.co/9h18YAXyA4
— Rajeev Chandrasekhar 🇮🇳 (@Rajeev_GoI) November 22, 2023
The settlement follows a lengthy investigation into Binance, the world’s largest cryptocurrency exchange. Changpeng Zhao will personally pay $50 million as part of the settlement, which includes a total payment of $4.3 billion. The investigation revealed Binance’s violation of US anti-money laundering and sanctions laws, including the failure to report over 100,000 suspicious transactions involving organisations designated as terrorist groups by the US government.
As part of the settlement, Binance will pay $1.81 billion within 15 months and an additional $2.51 billion in forfeiture. Richard Teng, a longstanding Binance executive, is set to take over as the new CEO, according to Zhao’s announcement.
Although the Justice Department sought an 18-month prison sentence for Zhao, legal experts suggest that the substantial fine appears manageable for Binance. Zhao, with a net worth of $10.2 billion, retains significant wealth and ownership stake in the company despite resigning as CEO.
In a separate development earlier this month, FTX founder Sam Bankman-Fried was declared guilty in a landmark financial fraud case. The verdict, resulting from a month-long trial in Manhattan federal court, found Bankman-Fried guilty on all seven charges, including embezzlement of $8 billion from the now-insolvent cryptocurrency exchange.
This marks one of the most significant financial fraud convictions to date and follows FTX’s abrupt bankruptcy announcement nearly a year ago, leading to the obliteration of Bankman-Fried’s estimated $26 billion personal wealth.
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