On November 21, 2023, FinCEN took unprecedented action to hold Binance Holdings Ltd. and several affiliates accountable for willful violations of the Bank Secrecy Act and its implementing regulations.
FinCEN’s consent order states that:
Binance personnel knew that the company was doing extensive business in the United States and devised a strategy to retain the commercial benefits associated with this business without registering with FinCEN as an MSB;
Binance delayed implementation of an AML Program and maintained categorical gaps (most notably with respect to exempting large numbers of users from KYC requirements, allowing Exchange Brokers free reign, and failing to implement risk-based controls applicable to AECs) once implemented; and
Binance failed to file any SARs with FinCEN despite processing billions of dollars’ worth of transactions involving a broad range of illicit activity, including ransomware actors and sanctioned entities.
FinCEN’s settlement agreement assesses a civil money penalty of $3.4 billion - the larget in U.S. Treasury Department History - , imposes a five-year monitorship, and requires significant compliance undertakings, including to ensure Binance’s complete exit from the United States. OFAC also assessed a penalty of $968 million and requires Binance to abide by a series of robust sanctions compliance obligations. In addition, Binance agreed to pay the DOJ over $4 billion.
FinCEN’s consent order can be found here.
The Treasury’s press release can be found here.
Read the DOJ’s press release here.