December 1, 2023
The head of Binance, the world’s largest crypto coin exchange, has pleaded guilty to a string of crimes, including giving major aid to Iranian efforts to evade US sanctions by making and receiving payments in crypto coins.
The US Justice Department said that over 4-1/2 years Binance moved close to $1 billion on behalf of customers based in Iran.
The beneficiaries included a huge number of Iranians so it appears the beneficiaries were not just government agencies but that many private citizens were also seeking to evade sanctions for their personal benefit.
Binance chief Changpeng Zhao stepped down as CEO and pleaded guilty to breaking US anti-money laundering laws as part of a $4.3 billion settlement resolving a years-long probe into the crypto exchange, prosecutors said November 21.
The US said that Binance, Zhao and other executives “knowingly and willfully conspired” to operate as unlicensed money services business from August 2017 until October 2022.
Binance’s compliance personnel, including its compliance officer, recognized that the exchange’s anti-money laundering controls “were inadequate and would attract criminals to the platform,” the US said.
The US said Binance had a “significant customer base” from some sanctioned jurisdictions and was aware that Iran represented “the majority of such customers.”
Binance knew full well that it would allow transactions between US users and those subject to US sanctions, “in violation of US law,” the US said.
From around January 2018 to May 2022, Binance processed 1.1 million crypto transactions worth at least $898.6 million between US customers and those who lived in Iran, the US said.
Around 2019, Binance continued to serve “thousands of users” identified as being from sanctioned countries, the US said, including over 12,500 users who provided Iranian telephone numbers.
Binance also failed to report suspicious transactions associated with the Palestinian militant group Hamas, the authorities said. Crypto wallets at Binance were found to interact with bitcoin wallets associated with groups proscribed as terrorist organizations by the United States and other countries, including Islamic State, the armed wing of Hamas, Al Qaeda, and the Palestine Islamic Jihad (PIJ), the US said. Some of those groups work with Iran, but the Islamic State is a sworn enemy of the Islamic Republic.