Dropdown button for navigation mobile view

Attorney General Merrick B. Garland Delivers Remarks Announcing Binance and CEO Guilty Pleas to Federal Charges in $4B Resolution

Posted by: Zaher Fallahi
Posted On: Nov 23, 2023

Tuesday, November 21, 2023

Share

Location

Washington, DC
United States

Binance Admits It Engaged in Anti-Money Laundering, Unlicensed Money Transmitting, and Sanctions Violations in Largest Corporate Resolution to Include Criminal Charges for an Executive

Remarks as Delivered

Good afternoon.

I am joined today by Treasury Secretary Janet Yellen, Deputy Attorney General Lisa Monaco, and CFTC Chairman Russ Behnam.

We are here today to announce that the Justice Department has secured felony guilty pleas from the world’s largest cryptocurrency exchange, Binance, and from its founder and CEO, Changpeng Zhao, also known as CZ.

Separate from the criminal enforcement actions the Justice Department is announcing today, Secretary Yellen and Chairman Behnam will also announce civil regulatory enforcement actions that the Treasury Department and the CFTC are taking against Binance. 

While criminal and civil enforcement actions are subject to different legal standards, this collective effort represents the whole of government approach that we are taking to combat corporate crime.

Binance has agreed to plead guilty to willfully violating the Bank Secrecy Act, knowingly failing to register as a money transmitting business, and willfully violating the International Emergency Economic Powers Act.

These laws ensure that our financial institutions are not available to designated terrorist organizations, drug traffickers, and sanctioned nation-states that threaten public safety and our national security.  

The Justice Department is requiring Binance to pay $4.3 billion in penalties and forfeiture. This is one of the largest penalties we have ever obtained from a corporate defendant in a criminal matter.

The Justice Department is also imposing a monitorship as well as reporting requirements on Binance as part of today’s resolution.

Moving forward, Binance must file the suspicious activity reports that were required by law. The company is required to review past transactions and report suspicious activity to federal authorities. This will advance our criminal investigations into malicious cyber activity and terrorism fundraising, including the use of cryptocurrency exchanges to support groups such as Hamas.

While this historic plea is an important measure of accountability, we know that corporations only act through the individuals who run them.

That is why we have also filed a felony charge against, and secured a guilty plea from, Changpeng Zhao for willfully violating the Bank Secrecy Act.

As CEO of Binance, Zhao willfully violated federal law that requires financial institutions to guard against money laundering and terrorist financing.

Zhao, who resides outside of the United States, entered his plea in person in the United States District Court for the Western District of Washington earlier today.

In August 2017, Zhao founded Binance as a platform where users could trade in cryptocurrency.

But from the very beginning, Zhao and other Binance executives engaged in a deliberate and calculated effort to profit from the U.S. market without implementing the controls required by U.S. law.

Zhao and Binance attracted and built a substantial U.S. customer base. Almost two years after Binance’s founding, Zhao told senior management that the U.S. market represented 20 to 30% of the company’s potential revenue.

Serving these U.S. customers meant that Binance was a U.S. financial institution. U.S. financial institutions must comply with U.S. law. Zhao and other senior management at Binance understood this.

They understood that the company was required by U.S. law to register with the Treasury Department as a money services business.  

And they understood that they were required by U.S. law to implement an effective anti-money laundering program. They failed to do either.

Instead, they concluded that complying with U.S. law would stifle their efforts to grow Binance’s profits, market share, and trading volume.

So, rather than comply, Binance facilitated billions of dollars of unregulated cryptocurrency transactions.

It willfully enabled hundreds of millions of dollars in transactions between American users and users subject to U.S. sanctions.

And its platform accommodated criminals across the world who used Binance to move their stolen funds and other criminal proceeds.

Binance prioritized its profits over the safety of the American people.

In part because of the crimes it committed, Binance became the largest cryptocurrency exchange in the world. Now Binance is paying one of the largest corporate penalties in U.S. history.

Binance employees knew and discussed that the company was serving thousands of users in sanctioned countries. And they knew that facilitating transactions between U.S. users and users in sanctioned countries would be in violation of U.S. law.

But they did it anyway. Binance enabled nearly $900 million in transactions between U.S. and Iranian users. And it facilitated millions of dollars in transactions between U.S. users and users in Syria and in the Russian-occupied Ukrainian regions of Crimea, Donetsk, and Luhansk.  

Binance’s own compliance personnel also knew that the company’s anti-money laundering procedures were inadequate and would attract criminals to the platform.

In a February 2019 chat, one compliance employee wrote that they needed a banner that said: “is washing drug money too hard these days – come to Binance; we got cake for you.”

By failing to comply with U.S. law, Binance made it easy for criminals to move their stolen funds and illicit proceeds on its exchange.

For example, between August 2017 and April 2022, there were direct transfers of approximately $106 million in bitcoin to Binance.com wallets from Hydra. Hydra was a popular Russian darknet marketplace, frequently utilized by criminals, that facilitated the sale of illegal goods and services.

Binance only stopped processing Hydra transactions in April of 2022, when the Justice Department and our German law enforcement partners seized control of the Hydra marketplace and shut it down.

From February 2018 to May 2019, Binance processed more than $275 million in deposits and $273 million in withdrawals from Bestmixer.  Bestmixer was one of the largest cryptocurrency anonymizing services in the world before it was shut down for money laundering.

Binance also did more than just fail to comply with federal law – it pretended to comply.

In June 2019, Binance publicly announced that it would block U.S. users from Binance.com and launch a separate U.S. exchange. That exchange, Binance.US, would register with the Treasury Department and serve the U.S. market. Binance blocked some U.S. users on Binance.com and redirected them to the U.S. exchange.

At the same time, however, Binance continued to allow some of its most important, high-volume U.S. users to remain on the unregistered Binance.com exchange.

At the direction of Zhao and other senior leaders at Binance, employees encouraged their high-volume U.S. users to conceal their U.S. connections, including by creating new accounts that obscured their locations.

As Zhao himself said in a September 2019 chat: “If we blocked US users from day 1, Binance will be not [sic] as big as we are today. We would also not have had any US revenue we had for the last 2 years.” He then added: “better to ask for forgiveness than permission.”

Over a year after Binance publicly announced that it was blocking U.S. users, an internal monthly company report attributed 16% of its total registered user base to the United States.  That was more than any other country on the unregulated Binance.com platform.

In the next monthly report, Binance removed the United States label and recategorized U.S. users with the label “UNKWN” – short for “unknown.”  In October 2020, users labeled as “UNKWN” represented approximately 17% of Binance’s registered user base.

Binance and Zhao profited significantly from their violations of federal law. That they are facing accountability for their crimes is due to the hard work of the extraordinary public servants at the Department of Justice.

I want to thank the Criminal Division’s Money Laundering and Asset Recovery Section; the National Security Division’s Counterintelligence and Export Control Section; and the United States Attorney’s Office for the Western District of Washington for their excellent work.

I also want to thank Secretary Yellen and her team at the Treasury Department, including IRS Criminal Investigation, as well as CFTC Chairman Behnam and his team for their extraordinary partnership in this matter.

In just the past month, the Justice Department has successfully prosecuted the CEOs of two of the world’s largest cryptocurrency exchanges in two separate criminal cases.

The message here should be clear: Using new technology to break the law does not make you a disruptor. It makes you a criminal.

This Justice Department has no tolerance for crimes that threaten our economic institutions and undermine public trust in the fairness of those institutions. And we will hold accountable the individuals who commit and profit from them.  

End of DOJ.

Zaher Fallahi, International Tax Attorney, CPA, advises clients with their Domestic and International Cryptocurrency & Tax Matters in conformity with the Bank Secrecy Act (BSA) and Anti-Money Laundering Compliance. Tel.: (310) 719-1040, (714) 546-4272 and (877) 687-7558 toll free nationwide. Websites: zflegal.com and zfcpa.com E-mail taxattorney@zfcpa.com

Ali Fassih
Ali Fassih
1713124814
It's been an honor to know Zaher Fallahi, Esq for the past 49 years.He is one of kind in almost everything. His clients and friends are always his priority. In my long life, I have had the chance to be helped by many people. But ZaherFalahi is a distinguished personality that his professionalism helped me to succeed in life.And that's why I never hesitate to refer my family and friends for all their legal and financial matters to him.
I have had the pleasure of knowing attorney Zaher Fallahi for over 10 years in a professional capacity. Zaher is knowledgeable, diligent, capable and a conscientious attorney. Zaher has a strong reputation in his field - International Tax and Undisclosed Foreign Bank Accounts - and is a good person, in general. I highly recommend him for your legal needs.
Jack
Jack
1699943138
Mr. Fallahi's expertise was critical in helping me navigate my complex tax matter, and helping me resolve it successfully. I am very happy to have worked with him. He was very knowledgeable and had excellent service.
Seyhun F.
Seyhun F.
1698124160
I recently used Mr. Zaher Fallahi’s services for my International Tax and CPA requirements. He has extensive knowledge, remarkable competence, and maintains a highly professional approach. His confidence, diligent follow-up, excellent communication, and accessibility, even during the weekends, provided great comfort. I would highly recommend him to anyone in the need of assistance with international tax matters
Yasamin Khalili
Yasamin Khalili
1696386366
I had the pleasure of working with Mr. Fallahi to obtain an OFAC license, and I couldn't be more satisfied with the results. Mr. Fallahi displayed exceptional expertise in navigating the complex OFAC regulations, ensuring a smooth and efficient process throughout. Mr. Fallahi's attention to detail, professionalism, and commitment to my case were truly impressive. Thanks to Mr. Fallahi, I successfully obtained the OFAC license I needed. I highly recommend him for anyone seeking expert legal assistance in this field.
Yousef Salami
Yousef Salami
1678051820
Dear Dr Fallahi helped me with cryptocurrency and stock market which are my business . During last five years ago, Dr Fallahi and his extremely expert team helped me to make money through crypto taxes and also Mr Jon is knowledgeable and always gives me best advice ,Appreciate your support and kindness.Best regards.
Reza Shafiee
Reza Shafiee
1669154077
I am writing my experience of getting an outstanding advice and going forward with getting an OFAC Permission for a family member. It was done fast, accurate, and perfectly amazing. I would recommend Dr. Fallahi with the highest rating possible. Thank you.
Eric B
Eric B
1669073014
Mr. Fallahi handled filing my foreign inheritance tax return and FBAR international tax filings. He was unassuming, thorough, and responsive. He was available via text, email or call, daytime hours and after hours, weekdays and weekends. He made himself available to my schedule and went above and beyond to ensure my peace of mind. It was a pleasure working with him and someone I highly recommend.
Alireza Modafe
Alireza Modafe
1668394662
I have known Mr. Fallahi for more than five years and have been using his legal expertise for several tax and OFAC related cases. I have been very happy with his advice and the outcome of those cases. He is an excellent attorney and CPA, very professional, responsive, and caring. He goes above and beyond to ensure your peace of mind. I highly recommend him.
A B
A B
1668040092
We hired Mr. Fallahi for an international money transfer matter that required OFAC compliance. Mr. Fallahi was very knowledgeable about the matter and knew all the legal nuances pertaining to the money transfer regulations. He is very kind and responsive and answered all of our questions during consultation session and after it. I definitely recommend him to any one that needs legal help in the similar cases.
Lisa Williams
Lisa Williams
1667953700
We enjoyed working with Mr. Fallahi who is quite knowledgeable and assisted us with an international financial endeavor with great success. We highly recommend him.
Vahid Emadi
Vahid Emadi
1666799203
Mr Fallahi was a great help to me and my family. He is a very knowledgeable lawyer and knows the ups and down of the law about our case. He gave us an step by step direction and made this a very easy process.I have to mention that his staff in Costa Mesa were always polite and helpful.
Mr. Zaher went above and beyond for me. His fees are comparable to other attorneys in the field. Nothing extravagant. In addition I received a personal attention I did not from other attorneys I've worked with. He made himself available when he was out of the office and worked diligently to meet a crucial deadline for me even as a first time customer. I am happy to have found an attorney such as Mr. Zaher.
Hossein
Hossein
1640013657
A dedicated and expert attorney. He spends time with the client as much as needed to answer any doubt or to ensure the client has a peace of mind in his/her case status. I've had attorneys who wouldn't care what happened to my case until I reach out to them. But Mr. Fallahi is quite opposite. He always follows up with you as he has a commitment to his work.
Knowledgeable OFAC and Tax Attorney/CPAI consulted Mr. Zaher Fallahi for OFAC and International Tax Matters. He did a great job for me. He is a very knowledgeable Attorney,CPA. I needed the work completed over the weekend, which he did instead of waiting for two weeks. He followed up on the status of the case regularly and I felt assured that everything was going well. I recommend his services without hesitation.
Nahid Ariant
Nahid Ariant
1639612533
DR. Fallahi is one of the most experienced, trustworthy, and knowledgable professionals in the field. I contacted him for the legal service. He was super helpful during the initial consultation and patiently answered all my questions. His responses were always timely even during the weekends, which I really appreciated . I had a great experience with DR.. Fallahi and would highly recommend him to those who needs legal services!
David Jafari
David Jafari
1637004741
I have known Mr. Fallahi for more than 15 years. He has helped us with several matters involving tax consequences of various transactions from the perspective of a tax attorney as well as matters related to OFAC. He is well versed in his profession and we do not hesitate to go back to him for advice on these matters. I wholeheartedly recommend him.
Bijan Golkar
Bijan Golkar
1636589140
We used Mr Fallahi's OFAC services for an international fund transfer. He is very well-versed in the subject matter and provided invaluable advice. He was available to answer our questions at all time. We appreciate and highly recommend him.
X Chen
X Chen
1633383304
Mr. Fallahi is one of the most experienced, trustworthy, and knowledgable professionals in the field. Recently, I contacted him for the incorporation service. He was super helpful during the initial consultation and patiently answered all my questions. His responses were always timely even during the weekends, which I really appreciated for. I had a great experience with Mr. Fallahi and would highly recommend him to those who needs legal services!
Sarel Gaur
Sarel Gaur
1633004601
Great experience using incorporation services as an MD radiologist! Very professional and responsive attorney + CPA
Greg
Greg
1630268731
We and our CPA worked with Zaher Fallahi to resolve a tax issue with a very satisfactory result. We greatly appreciated Mr. Fallahi’s knowledge, professionalism, and guidance. He was very easy to work with. He took care to patiently explain every step that we took, and completed our project in a very timely manner. Although our tax issue was probably a minor one for him, we never felt that he was giving us anything but top priority. I would highly recommend Zaher Fallahi to anyone needing tax/legal assistance.
Babak Mohseni
Babak Mohseni
1629657993
Hi. About six months ago I contacted Mr. Fallahi in regard to the inheritance money that I was trying to transfer to US. I needed guidance on what the legal procedure to follow is in lieu of all the issues that exist because of the Iran sanctions by the US government.Mr. Fallahi was extremely professional, accessible at all times and provided sound and legal advise. He guided me in the right direction and mentioned all the legal documents that I needed to collect while in Iran. Once i got back to US, he drafted the legal document that I presented to my bank and proceeded with the transfer of funds.I was so pleased with Mr Fallahi's conduct that I got him engaged with my cousin to take care of his case.
Shadi Shiri
Shadi Shiri
1619307484
My husband and I have been Mr. Zaher Fallahi’s client for more than 5 years. Mr. Fallahi has been outstandingly knowledgeable and caring. He is a compassionate professional that You can trust and benefit from his excellent advice. We feel lucky to have him by our side. Wish you all the best Mr. Fallahi.
I have been lucky to have Mr. Zaher Fallahi as my CPA and Tax attorney for the last 5 years. He is very informative and helpful in providing insights and perspectives. Zaher is detail-oriented, trustworthy, confident, and extremely knowledgeable in tax laws. He always goes the extra miles to make sure his client is protected and well served. Zaher is the most responsive person through email, that I have worked with in my life. Having his support is a peace of mind and blessing.
Hossein F
Hossein F
1614790936
Mr. Fallahi is very knowledgeable and highly competent in the OFAC area. He helped me navigate my case with ease and confidence. He advised and explained the steps necessary for the best outcome and frequently followed up with me to ensure my case was progressing. He always responded to my questions in a timely and expedient manner even on weekends. He takes special care of his clients and provides a high level of service. I highly recommend him to my friends and family and anyone who needs legal advice.
Hamid
Hamid
1614702813
Mr. Fallahi helped me with an OFAC related case. He did a great job for me and I am very happy to have worked with him.He explained the details of the process and gave me valuable advice.He is very knowledgeable and always available and responsive, even on weekends.
Golenaz El
Golenaz El
1604919344
Mr. Fallahi is amazing! very professional, very responsive and easy to communicate with. My husband and I had several consultations with Mr. Fallahi and his advise and the way he does business is excellent. You can really trust him and his experience specially with OFAC.We are very thankful and looking forward to do more business with him.I would highly recommend Mr. Fallahi regarding international financial issues and OFAC.
One of the best Tax attorneys and tax professionals in California. I always enjoyed visiting his office to get feedback and advice about various tax issues. Mr. Zaher Fallahi is both a CPA and a Tax Attorney and that combination is very helpful...
Dr. Shadi
Dr. Shadi
1598718032
Mr. Fallahi impressed me with his extensive knowledge and experience as a top of the line professional during the initial consultation. He patiently gave me detailed advice and instructions and gained my full trust. He answered any follow up questions very promptly and within hours, even on the weekends. Moreover, he followed up on my case several times to ensure everything is going well. Since I was on a very tight schedule, he expedited the process and made all the documents ready in one day. My experience was very positive and I would highly recommend him to my friends and family.
P K
P K
1590722834
I have been Mr.Fallahi’s client for over 15 years and as a healthcare professional, Mr. Fallahi and his team have done an excellent job for my personal and corporate taxes and book keeping.During these uncertain times of COVID-19, Mr.Fallahi and his team-members have been there every step of the way to help me file and send my PPP-COVID loan application as soon as it became available and they informed me about the EIDL COVID19 in such timely manner that on April 23, I saw the sum being deposited into my account!Zaher and his team treat every client like family and I am confident that I have been in good hands regarding my business financials and optimized personal and business tax filing for the last 15+ years .
Poorya Kiani
Poorya Kiani
1587264313
I met Mr. Zaher Fallahi two times and received consultation and services. I found him a very knowledgeable and helpful lawyer. He supported me patiently and timely. I really appreciate his excellent services.
David Khorram
David Khorram
1527881180
Zaher Fallahi has been our business financial advisory for over 25 years. His team have assisted us with all bookkeeping and tax preparations. His advise has been instrumental in our business growth. if you are looking for the best and most professional in tax service for personal or your business needs Mr. Fallahi ( Zaher Fallahi, CPA, Attorney At Law ) and his staff are the most knowledgeable and experienced in the business. they are thorough, experienced, intelligent and up to date on anything tax and business law related , financial or business related. Highly recommended
Next Reviewsjs_loader
Request Consultation