Binance Holdings Ltd., the world’s largest cryptocurrency
exchange, is being ordered to pay a record $3.4 billion fine and withdraw its
U.S. operations for deliberate breaches of the Bank Secrecy Act (BSA) uncovered
by the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN).
Binance violated anti-money laundering (AML) rules and
multiple sanctions programs by failing to implement measures to prevent
transactions involving terrorist groups (Hamas’ Al-Qassam Brigades, Al Qaeda,
ISIS), ransomware attackers and other criminals, according to FinCEN. The
crypto exchange allegedly matched trades between U.S. users and restricted
jurisdictions (Iran, North Korea, Syria, Crimea).
“Binance turned a blind eye to its legal obligations in the
pursuit of profit. Its willful failures allowed money to flow to terrorists,
cybercriminals, and child abusers through its platform,” Treasury Secretary
Janet Yellen said in the release. “Today’s historic penalties and monitorship
to ensure compliance with U.S. law and regulations mark a milestone for the
virtual currency industry. Any institution, wherever located, that wants to
reap the benefits of the U.S. financial system must also play by the rules that
keep us all safe from terrorists, foreign adversaries, and crime, or face the
consequences.”
In addition to FinCEN, Binance also entered into settlement
agreements with the Department of Justice, the Office of Foreign Assets Control
(OFAC), theInternal Revenue Service and the Commodities and Futures Trading
Commission as part of a broader, global agreement to settle related matters.
Binance will be forced to pay a $968 million penalty to the
OFAC and adhere to strict compliance mandates, monitored by FinCEN over the
next five years, during which time the Treasury will maintain access to the
company’s records and systems. Failure to comply would trigger further
penalties, including a $150 million fine collected by FinCEN.