As part of the settlement with Binance, FinCEN will impose a five-year monitorship program on the company’s order books despite the fact that the exchange agreed to completely exit the US market.
After months of thorough investigations on Binance Holdings Ltd., to ensure a smooth adoption of virtual currencies in the United States, the US Department of Treasury announced the largest settlement in its history on Tuesday, November 21, 2023. According to the announcement, the Financial Crimes Enforcement Network (FinCEN) agreed to accept a $3.4 billion fine from Binance for violating anti-money laundering regulations. On the other hand, the US Office of Foreign Assets Control (OFAC) will accept a settlement of about $968 million from Binance. The announcement highlighted that Binance has over the years been matching US-based customers, which accounted for about 17 percent of its total users, to markets that have been sanctioned for either terrorism, geopolitical differences, or ransomware attackers.
“Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform,” said Secretary of the Treasury Janet L. Yellen. “Today’s historic penalties and monitorship to ensure compliance with US law and regulations mark a milestone for the virtual currency industry. Any institution, wherever located, that wants to reap the benefits of the US financial system must also play by the rules that keep us all safe from terrorists, foreign adversaries, and crime, or face the consequences.”
Binance Absorbs US Blows for the Sake of Web3 Growth and Adoption
From the settlement resolution, it is evident that the Binance cryptocurrency exchange absorbed the bombshell fine to ensure consistent reliability, which is a sine quibus non to its future success. Moreover, Binance is trusted by over 160 million global users and processes over $65 billion in crypto volume daily. As part of the settlement plan, Binance is expected to exit the United States market, thus paving the way for local-based firms like Kraken, Coinbase Global Inc (NASDAQ: COIN), and FTX, which is planning to reopen soon. Mind you, FTX native token FTT has gained over 17 percent in the past 24 hours to trade around $3.59.
The settlement will see US-based cryptocurrency exchanges thrive amid the mainstream adoption of crypto assets fueled by institutional investors. For instance, BlackRock Inc (NYSE: BLK), a fund manager with over $9 trillion in assets under management (AUM), has significantly invested in Coinbase as it plans to offer spot Bitcoin and Ethereum exchange-traded funds (ETFs) soon.
Meanwhile, Binance intends to focus further on markets in which it has obtained operational licenses like the Middle East, Southeast Asia, Europe, Africa, and Latin America, among others. Moreover, the newly appointed CEO Richard Teng hails from a financial regulatory background in Singapore and Dubai.