The Treasury Department on Tuesday accused beleaguered cryptocurrency exchange Binance of failing to take actions to curtail Gaza-based militant group Hamas and a handful of organizations deemed terrorist groups from operating on the platform, as the crypto exchange continues to face heavy criticism following its major $4.3 billion settlement with the Department of Justice and as its CEO Changpeng Zhao steps down.
Key Facts
Binance and Zhao
pleaded guilty to money laundering violations in federal court in Seattle, agreeing to settle with the Department of Justice and the Commodities Futures Trading Commission for $4.3 billion in fines and restitution, while Zhao agreed to step down from his role as CEO effective immediately.
As part of that agreement, Binance also reached a settlement with the Treasury Department’s Financial Crimes Enforcement Network and the Office of Foreign Assets Control.
According to a Treasury Department
press release, the crypto exchange failed to implement safety programs aimed at preventing suspicious transactions with groups including Hamas and the Palestinian Islamic Jihad, as well as Al Qaeda and the Islamic State of Iraq and Syria (ISIS).
The Treasury Department alleges the crypto giant also failed to prevent and report transactions with “ransomware attackers, money launderers, and other criminals,” as well as trades between users in the U.S. and in countries sanctioned by the U.S. government, including Iran, North Korea and Syria, as well as the Crimean peninsula, which was illegally annexed by Russia in 2014.
Binance allegedly “turned a blind eye to its legal obligations in the pursuit of profit,” Treasury Department Secretary Janet Yellen said in a
statement, allowing “money to flow to terrorists, cybercriminals, and child abusers through its platform.”
Federal authorities, following a years-long investigation, allege Binance allowed those organizations to transact freely on the exchange, enabling payments for child sex assault and narcotics transactions.
Contra
In a
post on X, formerly known as Twitter, Zhao admitted to making “mistakes,” though he defended the company, saying it has not been accused of misappropriating user funds or engaging in market manipulation. Zhao also agreed to enter a guilty plea to money laundering charges. Longtime executive Richard Teng, who currently serves as the exchange’s head of regional markets outside the U.S., took over as the company’s new CEO.
Key Background
Israeli Prime Minister Benjamin Netanyahu declared war on Hamas within hours of Hamas’ Oct. 7 attack on Israel, which Israeli officials say has killed roughly 1,200 people. More than 12,000 people have since been killed in Gaza, according to the Hamas-led Health Ministry. As the war entered its second month, pleas from western leaders escalated for humanitarian aid to enter Gaza and for breaks in the fighting. Netanyahu earlier this month agreed to daily
four-hour pauses aimed at allowing Gaza residents to relocate to the southern part of the territory.
What To Watch For
Israeli officials announced Tuesday they are closing in on a monumental deal with Hamas to release some of the Israeli hostages who have been held by Hamas since the militant group’s Oct. 7 attack. More than 240 hostages have been taken by Hamas. In a televised address, Netanyahu called on members of Israel’s government to approve the deal, saying “the war has its stages, and the release of hostages has its stages,” adding: “we won’t rest until we achieve total victory, and until we bring everyone back.”
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