Binance to pay $4.3 billion fines in US, founder to step down

Binance, the world’s biggest cryptocurrency exchange, is expected to pay fines totalling $6.6 billion and its CEO will step down.

Binance, the world’s biggest cryptocurrency exchange, is expected to pay fines totalling $US4.3 billion ($6.6 billion) and its chief is planning to step down, a US media report said on Tuesday.

In a deal with US authorities that could allow the company to keep running, Binance chief executive Changpeng Zhao intends to plead guilty to violating US anti-money laundering rules and leave his position, The Wall Street Journal reported citing unnamed sources.

The agreement would end most of the investigations into Binance, which was created in 2017 and cornered much of the crypto-trading market, turning Mr Zhao into a billionaire.

Changpeng Zhao with French President Emmanuel Macron. Picture: Instagram

Binance runs crypto exchanges and provides other services across the world, but it has taken a severe hit since crypto markets collapsed and regulators began probing the legality of its business.

Mr Zhao, who has often been presented as the arch rival of disgraced FTX founder Sam Bankman-Fried, was due in court Tuesday to enter his plea, the Journal report added.

The agreement with authorities would also let Mr Zhao keep his majority ownership in Binance.

He is expected to face sentencing at a later time.

For now, executives have left the company and it has laid off staff this year as it grappled with probes in the United States.

The William Kenzo Nakamura Courthouse in Seattle. Picture: David Ryder/Getty Images/AFP

The Justice Department, whose investigation looked into Binance’s program to find and prevent money laundering, declined to comment.

The Journal added that the Justice Department had also looked into whether Binance allowed people in sanctioned countries — such as Iran and Russia — to trade with Americans.

Binance did not respond to media queries on the matter.

The $US4.3 billion in fines reportedly include sums to address a civil lawsuit filed by the Commodity Futures Trading Commission, and claims levelled by the Treasury Department’s agencies.

The deal will allow Binance to keep operating. Picture: Justin Sullivan/Getty Images

But this deal does not include a settlement with the Securities and Exchange Commission (SEC), another regulator.

The SEC pressed a raft of charges against Binance in June, saying it allowed US residents to trade even when it was not registered in the country as a securities exchange.

The case also alleged the firm misused customer funds.

While Binance was founded in China, Mr Zhao moved its operations to other locations internationally after a crackdown on the crypto sector by Beijing.

The volatile industry surged in 2021 with a range of complex products and celebrity endorsements propelling it to a valuation in excess of $US3 trillion ($4.6 trillion) last year.

But a series of scandals including the collapse of the FTX exchange and criminal charges for its executives saw public confidence evaporate and investors pull their money out.