back to article Binance and CEO admit financial crimes, billions coughed up to US govt

The world's largest cryptocurrency exchange just got a little smaller, with the US Department of Justice announcing Binance and its CEO Changpeng Zhao have both pleaded guilty to a multitude of financial crimes. As a result Binance will fork out $10 billion to Uncle Sam in fines and settlements. According to a criminal case [ …

  1. nintendoeats Silver badge

    So, anybody going to jail?

    I thought not.

    1. Anonymous Coward
      Anonymous Coward

      Follow the Money?

    2. simonlb Silver badge
      WTF?

      Yeah, I'm sure I'm missing something here. So they knowingly broke multiple laws, have openly admitted to it and processed around $1B to people in sanctioned countries but no one is going to jail? Although no fraud is mentioned here, there is definitely something fishy about the conclusion of this. I mean, my understanding of the US is that if you make even a slight 'mistake' on your tax return the IRS get quite annoyed with you.

      1. Anonymous Coward
        Anonymous Coward

        The IRS actually resolves most "slight mistakes" on your returns with a letter. Bigger ones can end with penalties and past-due interest. Criminal penalties, ie jail and/or summary execution are actually rare....

      2. Benegesserict Cumbersomberbatch Silver badge

        Time for the corporate death penalty. All your shares are belong to US(A).

    3. NeilPost Silver badge

      They should be shut-down, not plea-bargained.

    4. Michael Wojcik Silver badge

      According to Molly White, CZ "faces the possibility of 18 months in prison".

  2. CowHorseFrog Silver badge

    Yup another article only about CEOs, just like the good old days of the American South before the war...

    1. CowHorseFrog Silver badge

      Its amazing how many down votes i get, its almost like these people actually believe that CEOs are super fucking wonderful (tm).

  3. DS999 Silver badge

    Where's the $10 billion coming from?

    Did they really make that much as a middleman for crypto trading? Considering how thinly traded that is, that would be a massively higher profit margin than Wall Street firms make off consumer trades!

    Or did they make their money off trading with customer funds like Sam Bankfraud, with the difference that their trades made money instead of losing money?

    1. Blazde Silver badge

      Re: Where's the $10 billion coming from?

      The press release states $1.35bil came from trading fees, which feels ballpark correct compared to Wall Street market makers and considering the fees/spreads are actually quite similar.

      The rest sounds suspiciously like money in the process of being laundered (the phrase 'civil forfeiture' is used), which means it might be anything from proceeds of Iranian oil bypassing sanctions to money extorted by North Korean APTs, and in most of those scenarios we can expect them to be discrete about the details for legal and diplomatic reasons.

      They've probably also benefited enormously just from having shareholder capital invested in crypto-currency.

      1. Catkin Silver badge

        Re: Where's the $10 billion coming from?

        Civil forfeiture in the US is a pretty grotesque thing, in my opinion. It allows law enforcement to nab assets on the suspicion that they're part of criminal activities with return to the original owner only taking place if legitimate origins can be proven.

        In practice, this means that anyone with possessions that are a bit too nice or who have a bit too much cash for their perceived station in life are liable to lose it to police and rarely get it back.

        1. CowHorseFrog Silver badge

          Re: Where's the $10 billion coming from?

          Does this actually happen in reality Or is this another one of the american dream bullshit ?

          1. Ozan

            Re: Where's the $10 billion coming from?

            My past experience says if they can, they will.

          2. blackcat Silver badge

            Re: Where's the $10 billion coming from?

            Watch this channel:

            https://www.youtube.com/@stevelehto

            In some states the money/assets taken can be kept by the police department. So absolutely no incentive to take as much as you can...

            Even at a federal level. In 2021 (I think) the FBI raided a bank in LA and seized the contents of every safety deposit box. So far they've not been able to show that any criminal activity had taken place at the bank but have pretty much kept everything, which is estimated to be ~$100M in value.

            The FBI has pretty much said if you can't prove that everything in the box belongs to you and that you were in possession of the items legally then you can't have them back. Judges have supported the FBI as well.

            1. CowHorseFrog Silver badge

              Re: Where's the $10 billion coming from?

              Some people might call it karma...

              1. blackcat Silver badge

                Re: Where's the $10 billion coming from?

                And some call it legalised robbery.

                If the authorities came along and decided that you have nice stuff and just took it you would probably be rather miffed.

          3. Catkin Silver badge

            Re: Where's the $10 billion coming from?

            The median civil forfeiture amounts to $1.2k so it's rarely the drug dealing kingpin or crooked banker having their bales of cash and flashy cars seized that the authorities like to present.

            1. blackcat Silver badge

              Re: Where's the $10 billion coming from?

              Wow! That is a pretty low value. You can understand why they get away with it as taking them to court will cost 10-100x that.

              Some of the stories are just crazy. I can't believe that they are allowed to get away with it but qualified immunity and friendly (paid off?) judges are key aspects.

  4. Potemkine! Silver badge
    Holmes

    Cryptocurrencies used for criminal reasons? I'm shocked, really.

    1. TReko

      Crypto is a minnow

      Banks launder way more money. They just fill in the paperwork for front companies.

      It's a big club and crypto isn't in it, perhaps it was used by the smaller players. Perhaps the big banks and consulting law firms wanted to quash competition?

  5. CommonBloke
    Holmes

    Fining is one thing

    Receiving the owed money is a wholly different story. Who here wants to bet the scammer will spend the next 10 years or so avoiding pay, coming up with all sorts of bullshit excuses that the judges will eat up because he's still rich?

  6. renniks

    Scrap all crypto I say - dodgy AF

  7. Howard Sway Silver badge

    is washing drug money too hard these days - come to Binance we got cake for you

    Noooooo! It's even worse if they were also tempting people to enter the nightmare of cake

    1. Claptrap314 Silver badge

      Re: is washing drug money too hard these days - come to Binance we got cake for you

      Copywritten & blocked in the US by the LDS... :D

  8. Jedit Silver badge
    FAIL

    "If we blocked US users from day 1, Binance will be not [sic] as big as we are today"

    Or to put it another, more honest and factually correct way: if they'd blocked US users from day 1, they would have had far fewer suckers to fleece.

  9. abetancort

    The cost of a jail-out card

    It seems that $10 billion in the US buys you a nice jail-out card.

    1. Doctor Tarr

      Re: The cost of a jail-out card

      Which raises the question…..

      What’s more valuable to society? A long jail term or a $10bn fine? Assuming that the fine is paid and you can’t have both.

      1. NeilPost Silver badge

        Re: The cost of a jail-out card

        In most countries, the rule of law is applied ‘without fear or favour’, is proportionate and fairly applied…. and is written into their laws, contribution, precedent etc.

        If not, you end up in a banana republic.

        1. Blazde Silver badge

          Re: The cost of a jail-out card

          Indeed. In the US the phrase 'reached a plea bargain' frequently just means 'lawfully bribed the prosecution'

          1. Benegesserict Cumbersomberbatch Silver badge

            Re: The cost of a jail-out card

            A prosecutor worth a shred of integrity would have made the penalty a fine, plus disclosure of where the hard currency came from, and where it went.

    2. DS999 Silver badge

      Re: The cost of a jail-out card

      Since he lives in China extradition would have been difficult. That probably provides you more leverage to negotiate a plea deal since the alternative is an arrest warrant meaning his travel is restricted to countries that won't extradite and an open warrant that languishes for years.

      Since the main reason people commit crimes like money laundering is to make themselves richer, forcing him / his company to disgorge such a large amount of money isn't nothing. Without his cooperation Binance would have been able to keep all the ill gotten gains. If they threw the book at him and were able to put him in prison, that money would have remained in the company so the shareholders in Binance would benefit. Most of them were probably unaware of what was going on, but some likely at least knew but couldn't be proven guilty in a court of law. This settlement makes them "pay" as well.

      It's an imperfect world. The criminal justice system has always been set up more for dealing with petty crimes like "I broke into your house and stole $100 cash" than complex financial crimes that span the world and involve many players both those guilty of additional crimes to those charged and those unaware of what was happening but financially benefiting from the crimes.

    3. Mast1
      Joke

      Re: The cost of a jail-out card

      That does say something about inflation.

      My 1970 version of the board game "Monopoly" only used to require a GBP50- fine to get out of jail.

  10. Michael Wojcik Silver badge

    Bitten by the cliché

    CZ: "Better to ask forgiveness than permission."

    US DoJ: "Sure, ask away. We can still say 'no'."

  11. amanfromMars 1 Silver badge

    When Madness and Mayhem Rule, Conflict Delivers CHAOS awaiting in the Wings .....

    ....... to Emerge and Surge and Purge from Deep and Dark Shadows

    Does that tale ...... "Binance and CEO admit financial crimes, billions coughed up to US govt .... Chief quits, pays own penalty after helping crooks launder cash, aiding sanctions evaders” ..... dispel the suspicion and confirm the fact that the United States of America is a failed pariah criminal state enterprise?

    Or is such behaviour default normal for capitalism in a supposedly fair and popular vote winning, democratically elected executive office administration/governmental machine?

  12. probgoblin
    Childcatcher

    If you think of it less as a fine...

    And more as a business expense, ~$10b is not a bad deal for what they've managed to build. They bypassed all that pesky regulation and legal rigamarole that slows down startups just because what they do is "illegal" and "a variety of crimes" and wraps it into a one time cost they got to pay after they managed to capture a significant part of the market.

    This is the bold leadership and vision our future deserves.

  13. willyslick

    Sorry, but how stupid can one be to write this in a chat:

    ""Better to ask forgiveness than permission."?

    This is the attitude; move fast and break things - the consequences will rarely be applied to the perpetrators - which shows here again in that there is no jail time end the company is allowed to continue on with the same business model and habits.....

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