It’s been an eventful week for crypto exchanges and the U.S. government.
Changpeng Zhao, also known as “CZ,” the founder and CEO of Binance, plans to step down and plead guilty to violations for U.S. anti-money laundering requirements brought on through the Department of Justice, according to a new Wall Street Journal report.
Zhao is expected to appear in a Seattle federal court on Tuesday afternoon and enter his plea. Binance is also expected to pay fines of $4.3 billion. The DOJ is hosting a press conference at 3:00pm EST and is expected to discuss the Binance suit further.
The crypto exchange did not respond to multiple requests for comment from TechCrunch on the charges.
Binance launched in June 2017 and within 180 days became the largest crypto exchange in the world. It had over $11.6 billion in trading volume during the past 24-hours, 515% higher than $1.9 billion in trading volume from the second largest crypto exchange, Coinbase, according to CoinMarketCap data.
This comes less than a day after the SEC charged Kraken, the third largest crypto exchange by trading volume, with allegedly operating as an “unregistered securities exchange, broker, dealer and clearing agency.”
Separately, in February, Kraken agreed to end crypto staking services for U.S. clients and settled a past suit with the SEC after agreeing to pay $30 million in charges for “disgorgement, prejudgment interest and civil penalties.”
The DOJ charges against Binance come over five months after the U.S. Securities and Exchange Commission accused the exchange and Zhao of lying to regulators about its operations, filing 13 charges against the defendants in the federal case. Zhao and Binance were allegedly “intimately involved” in directing the trading entity’s business operations and providing crypto-related services to the Binance.US platform, which claims it’s an independent exchange in the SEC filing.
In late March the U.S. Commodity Futures and Trading Commission also filed a suit against Binance, Zhao and its Chief Compliance Officer Samuel Lim for allegedly breaking trading and derivatives rules.
Binance has been in headlines this past year for a range of reasons like Zhao’s comments contributing to the collapse of FTX, which was once one of its top competitors. In April, Binance.US, its American sister company, broke off its $1.3 billion deal to buy crypto broker Voyager Digital’s assets due to a “hostile and uncertain regulatory climate.”
In August, Checkout.com cut ties with Binance over concerns about the crypto firm’s alleged issues with anti-money laundering, sanctions and compliance controls. At the time, Binance’s spokesperson said it does not agree with “Checkout’s purported basis for termination and are considering our options for legal action.”
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