Binance faces massive fine of $4 billion to settle US criminal charges of money laundering and bank fraud

Binance, the world’s largest cryptocurrency exchange, is reportedly facing a massive $4 billion fine to settle U.S. criminal charges. The U.S. Justice Department is in discussions with Binance Holdings to resolve a lengthy investigation, seeking over $4 billion as part of the proposed settlement, Bloomberg reported on Monday.

People familiar with the matter told Bloomberg that the negotiations involve the potential for criminal charges against Binance’s founder, Changpeng Zhao (popularly known as CZ), in the United States.

“The US Justice Department is seeking more than $4 billion from Binance Holdings Ltd. as part of a proposed resolution of a years-long investigation into the world’s largest cryptocurrency exchange,” Bloomberg reported.

While the ongoing government probe is said to be reaching its conclusion, the exact penalties and timeline were not provided by the sources. An announcement on the resolution is anticipated by the end of the month. Binance has not yet responded to media inquiries, and the Justice Department declined to comment. Bloomberg added:

“Negotiations between the Justice Department and Binance include the possibility that its founder Changpeng Zhao would face criminal charges in the US under an agreement to resolve the probe into alleged money laundering, bank fraud and sanctions violations, according to people familiar with the discussions.”

In June, the Securities and Exchange Commission (SEC) filed a lawsuit against Binance and its founder, CZ, alleging that they were involved in an “elaborate scheme to evade U.S. federal securities laws.” Binance, in response, refuted the SEC’s accusations and said that would “vigorously defend” the integrity of its platform.

Three months earlier, the Commodity Futures Trading Commission took legal action against the exchange, accusing Binance and Zhao of “willful evasion” of U.S. commodities law. The lawsuit contended that Binance operated an “illegal” exchange and maintained a “sham” compliance program. Changpeng Zhao called the charges an “incomplete recitation of the facts.”

We first reported the story two years ago after an investigation into Binance by the Justice Department and the Internal Revenue Service (IRS). The inquiry revealed that authorities focusing on money laundering and tax offenses were seeking information from individuals with knowledge of Binance’s business. Bloomberg said at the time that “officials who probe money laundering and tax offenses have sought information from individuals with insight into Binance’s business.”

Founded by Changpeng Zhao and Yi He, Binance is a cryptocurrency exchange platform that combines digital technology and finance. The company provides access to exchange digital currency pairs on the market while maintaining security, and liquidity, enabling a safe and efficient deal with anyone, anytime and anywhere.

Before founding Binance, CEO Changpeng Zhao previously founded Fusion Systems in 2005 in Shanghai; the company that built high-frequency trading systems for brokers. In 2013 he joined Blockchain.info as the third member of the cryptocurrency wallet’s team. He also worked at OKCoin as CTO for less than a year, a platform for spot trading between fiat and digital assets.