WATCH LIVE: Garland and Yellen hold news conference after Binance founder pleads guilty to felony

7 views 6:34 pm 0 Comments November 21, 2023

Attorney General Merrick Garland and Treasury Secretary Janet Yellen are scheduled to hold a news conference at 3:00 p.m. EST.

CEO Changpeng Zhao pleaded guilty to one count of failure to maintain an effective anti-money-laundering program in federal court in Seattle. Binance is a Cayman Islands limited liability company.

The founder of Binance pleaded guilty to a felony charge related to failing to prevent money laundering. According to a source familiar with the deal, this plea coincides with the company agreeing to pay over $4 billion as part of a settlement with the U.S. government. The information was provided on the condition of anonymity ahead of an anticipated official announcement.

The charge was similar to practices uncovered after last year’s collapse of the second-largest cryptocurrency exchange, FTX.

Zhao had previously faced allegations of diverting customer funds, concealing that the company was commingling billions of dollars in investor assets and sending them to a third party that Zhao also owned.

It comes months after the company was accused of operating as an unregistered securities exchange and violating a slew of U.S. securities laws in a lawsuit from regulators.

Scandals and market meltdowns have marred the cryptocurrency industry. Sam Bankman-Fried, the 31-year-old founder of the cryptocurrency brokerage FTX, was convicted earlier this month of fraud for embezzling at least $10 billion from customers and investors.

Of his many depictions in the cryptocurrency industry, Changpeng was best known as the chief rival to Bankman-Fried.

Changpeng and Bankman-Fried were initially friendly competitors in the industry, with Binance investing in FTX when Bankman-Fried launched the exchange in 2019. However, the relationship between the two deteriorated, culminating in Changpeng announcing he was selling all his cryptocurrency investments in FTX in early November 2022. FTX filed for bankruptcy a week later.

At this trial and in later public statements, Bankman-Fried tried to blame Binance and Changpeng for allegedly orchestrating a run on the bank at FTX.
In October, a jury found Bankman-Fried guilty of wire fraud and several other charges. He is expected to be sentenced in March, where he could face decades in prison.