Binance, the largest crypto exchange in the world, has cut a deal with the US Department of Justice (DOJ) that appears to allow Binance to stay in operation.
According to multiple reports, Binance will pay a hefty $4.3 billion penalty and plead guilty to charges, and CEO and founder Changpeng Zhao (CZ) will exit the business.
According to WSJ.com, the amount includes a settlement for civil charges which were filed by regulators but the SEC has yet to announce an agreement. The report states that the amount includes funds to settle with both the Commodities Futures Trading Commission (CFTC) as well as those from the US Department of Treasury. The SEC filed charges against Binance and Zhao this past June.
Zhao will also fork over $50 million personally, according to the report.
Expectations of criminal charges from the US have been bouncing around for years now. Allegations of money laundering and other transgressions have placed Binance under intense scrutiny. In the early days of crypto, marketplaces that allowed trading in digital assets had few restrictions on who used their services, thus allowing bad actors to use crypto to launder funds or for illicit activities. In recent years, professional operations have rushed to incorporate AML/KYC processes to adhere to traditional financial services rules on monitoring operations. Binance has been probably the most aggressive crypto exchange, pursuing compliant operations and hiring prominent attorneys while working with regulators around the world.
While Zhao will depart Binance, he is expected to retain his majority ownership but perhaps return to work at the firm in the coming years.
There appears to be light at the end of the tunnel for Binance as it can shift focus away from pending US litigation to operating a crypto exchange. The ongoing threat of the unknown legal status of Binance is being cleared by the settlement with the DOJ.
Binance is still not completely out of the woods as it is uncertain as to what the SEC will do next, and recently, there have been calls from US policymakers to be more stringent in regard to operations within the crypto market.