https://www.citationneeded.news/issue-95/
"After months of lobbying, President Trump has pardoned Binance founder
Changpeng Zhao. Zhao, who in 2017 founded what would later become the largest
crypto exchange in the world, pleaded guilty in late 2023 to one felony charge
of failing to maintain an effective anti-money laundering program at Binance.
The company itself pleaded guilty to three additional charges: conspiracy to
conduct an unlicensed money transmitting business and to fail to maintain an
effective anti-money laundering program, conducting an unlicensed money
transmitting business, and sanctions violations. CZ served four months of
prison time, and was released in September 2024. He paid a $50 million fine,
and his company paid another $4.3 billion in penalties.
The indictment was damning, with evidence suggesting that CZ himself had
directed Binance to implement a sham compliance program that would fool US
regulators into believing they were screening for suspicious or illicit
activity, while simultaneously allowing illicit transactions to continue
unimpeded. While the primary Binance platform was not permitted to serve US
customers, the company actively encouraged US-based users to circumvent
Binance’s own geofencing, with CZ instructing: “On the surface we cannot be
seen to have US users but in reality, we should get them through other creative
means.” Binance was simultaneously aware that it was offering services to
sanctioned users, with the company’s Chief Compliance Officer writing that
“There is no fking way in hell I am signing off as the CCO for the ofac shit”
out of fear he could go to jail. (OFAC is the Treasury office that administers
sanctions.) Another compliance team member acknowledged the prevalence of
illicit activity on Binance, writing: “we need a banner ‘is washing drug money
too hard these days - come to binance we got cake for you’.” In discussions
regarding Binance’s use by designated terror groups like ISIS and Hamas, or
sanctioned customers from Russia, Binance’s CCO urged other employees not to
freeze the assets, and acknowledged “Like come on. They are here for crime.”
Another employee in charge of money laundering reporting agreed, “we see the
bad, but we close 2 eyes.”
Nevertheless, the White House press secretary has positioned the pardon as
relief from an unfair prosecution, asserting that “The Biden administration’s
war on crypto is over” and describing Zhao’s conviction as evidence of the
previous administration’s “desire to punish the cryptocurrency industry”. While
the crypto industry and the Trump administration have tried to portray any
regulatory oversight or enforcement in the crypto space as an unjust “war on
crypto”, I think the Trump administration has overplayed its hand by describing
this prosecution as such. Most outsiders can distinguish targeted enforcement
against clear misconduct from hostility toward innovation, and excusing
justifiable prosecutions as mere political persecution only serves to highlight
how frequently the Trump administration and the crypto industry use this tactic
to try to dodge justice, accountability, and reasonable regulatory oversight."
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
