Binance: The Crypto Scandal of the Century
US Department of Justice Charges Binance for Extensive Money Laundering and Sanctions Violations
Binance hit with money-laundering charges by DOJ.
Hold onto your hats, folks, because Binance, the world’s largest cryptocurrency exchange, is in hot water! In a jaw-dropping turn of events, the US Department of Justice has revealed criminal charges against the company and its CEO, Changpeng Zhao. Brace yourselves, tech enthusiasts, because this scandal is about to rock the already tumultuous world of crypto.
The charges, unsealed just moments before US Attorney General Merrick Garland’s press conference, accuse Binance of facilitating the laundering of vast amounts of dirty money across the globe. From Cuba to Iran to Russia, no corner of the world was safe from Binance’s allegedly shady dealings. The accusations include billions of dollars in transactions that violated US anti-money-laundering laws. We’re not talking chump change here—over a billion dollars were involved in actual criminal activities and sneaky sanctions evasions.
It gets worse. Garland dropped a bombshell during the press conference—Zhao himself pleaded guilty to a felony money-laundering charge. Ouch! As part of a settlement with the DOJ, Binance has agreed to pay a staggering $4.3 billion fine. And if that’s not enough to make your eyes pop out of their sockets, Zhao has also resigned from his role as CEO and agreed to cough up an additional $150 million. Talk about a hefty price to pay for breaking the law!
According to Garland, “Binance prioritized its profits over the safety of the American people.” The company soared to the top as the world’s largest crypto exchange, but at what cost? Garland pointed out that Binance’s astronomical success was partly due to the very crimes it committed. Now the company finds itself paying one of the largest corporate penalties in US history. Ouch, that’s gonna leave a mark.
But what exactly did Binance do to earn such a rap sheet? The charging documents describe a company that actively turned a blind eye to the trading of funds from sanctioned countries like Iran, Cuba, Syria, and shady parts of Ukraine. Binance allegedly had a wild party with the now-defunct criminal dark-web market, Hydra. That’s right, folks, Binance was rubbing elbows with the nefarious characters of the digital underworld.
Former Binance executives reveal that the company’s illicit financing problems were “overwhelming to an unsolvable degree.” I can only imagine—sounds like a real-life nightmare! Compliance teams were left scrambling to address all the sanctions evasion taking place, while the execs seemed more interested in brushing off the issues. It’s a wonder they managed to sleep at night!
The charging documents go into gruesome detail, alleging that Binance enabled over 1.1 million transactions worth nearly $900 million between US individuals and Iranians. Each one of these transactions was a violation of sanctions. And as if that wasn’t scandalous enough, Binance also allegedly processed a cool $106 million in money flowing directly from the Russian dark-web market Hydra. Narcotics, stolen data, and money-laundering services—talk about a lively bunch of clients!
But wait, there’s more! Binance apparently had a love affair with BestMixer, a cryptocurrency “mixing” service that made transactions harder to trace. Dutch law enforcement had to swoop in and shut that party down in May 2019 because it was part of a money-laundering investigation. Binance users included ransomware gangs, hackers, and scammers. This was starting to sound like a rogue’s gallery of digital delinquents.
Oh, and let’s not forget Binance’s nonchalant attitude toward know-your-customer (KYC) requirements. For years, they simply didn’t bother with them. Essentially, that’s like having a skyscraper without a foundation. Even when they finally implemented stricter KYC rules in 2021, the indictment claims that Binance often ignored sanctions violations or knowingly allowed users to bypass their money-laundering checks. In one mind-boggling instance, more than 12,500 users had Iranian phone numbers on their accounts, yet they were allowed to keep trading. Talk about selective vision!
One internal communication even hints at a strategy of willful ignorance: “We definitely do not want to acknowledge we have them onboard… our official stance is we gotten rid of all of them [sanctions] and blocked.” Smooth move, Binance, smooth move.
And if you thought it couldn’t get any worse, Binance’s compliance team allegedly checked a user’s “VIP level” before deciding whether to ban their account or create a shiny new one for them. Who needs rules when you’re a VIP, right? One Binance employee even joked about washing drug money, saying, “Is washing drug money too hard these days? Come to Binance. We got cake for you.” Oh boy, talk about a tasteless joke.
In case you thought these accusations came out of thin air, rumors and reports of Binance’s involvement in criminal activities have been swirling for years. Reuters reported in June 2022 that Binance enabled over $2.35 billion in money laundering by hackers and drug traffickers. Binance vehemently denied these claims, but it seems like the truth has finally caught up with them.
This scandalous chapter in the crypto world comes hot on the heels of the fraud conviction of Sam Bankman-Fried, former CEO of FTX. In the words of Garland himself, “Using new technology to break the law does not make you a disruptor, it makes you a criminal.” Wise words, indeed.
So, dear readers, buckle up because Binance’s wild ride has hit a serious roadblock. The crypto industry may be full of thrills and promise, but it’s essential to separate the wheat from the chaff. Let this be a cautionary tale for all those who think they can outrun the law in the wild world of cryptocurrency. Stay tuned for more twists and turns in this gripping saga!
What do you think about the Binance scandal? Are you shocked, amused, or a little bit of both? Let us know in the comments below!
