Called the “largest in history,” two settlements totaling $4.3 billion were announced late Tuesday against Binance Holdings Ltd. and its affiliates for violations of U.S. anti-money laundering laws, the Treasury Department said in a release.
Binance is also barred from doing further business in the United States, the agency added.
Treasury said the action was taken through its Financial Crimes Enforcement Network (FinCEN), the Office of Foreign Assets Control (OFAC), and IRS Criminal Investigation (CI). Binance was described as the world’s largest virtual currency exchange, responsible for an estimated 60% of centralized virtual currency spot trading.
The FinCEN settlement was a $3.4 billion civil money penalty (CMP) and the OFAC penalty was $968 billion, according to Treasury.
The agency said the violations include failure to implement programs to prevent and report suspicious transactions with terrorists — including Hamas’ Al-Qassam Brigades, Palestinian Islamic Jihad (PIJ), Al Qaeda, and the Islamic State of Iraq and Syria (ISIS) — ransomware attackers, money launderers, and other criminals, as well as matching trades between U.S. users and those in sanctioned jurisdictions like Iran, North Korea, Syria, and the Crimea region of Ukraine.
“By failing to comply with AML and sanctions obligations, Binance enabled a range of illicit actors to transact freely on the platform,” Treasury said.
In addition to the penalties, FinCEN also is imposing a five-year monitorship, and requires significant compliance undertakings, including to ensure Binance’s complete exit from the United States.
Treasury will also retain access to books, records, and systems of Binance for a period of five years through a monitor, the agency said. “Failure to live up to these obligations could expose Binance to substantial additional penalties, including a $150 million suspended penalty, which would be collected by FinCEN if Binance fails to comply with the terms of the required compliance undertakings and monitorship,” Treasury said.