The federal courthouse in Seattle was the scene of a pivotal event in the U.S. government’s crypto crackdown Tuesday as prosecutors cemented a settlement in a landmark case against the world’s largest cryptocurrency exchange.
Binance CEO Changpeng Zhao, appearing inside the courthouse at 7th Avenue and Stewart Street, pleaded guilty to a range of securities law violations that prosecutors said enabled money laundering, terrorist financing, and other illegal activities on the cryptocurrency exchange, allegedly evading federal law for nearly four years.
Zhao avoided reporters and photographers as he left the courthouse, walking down a side stairway to a waiting vehicle. He said in an online statement that he is stepping down from his role as CEO of the company, which prosecutors described as one of the terms of the settlement agreement.
Under the plea deal, Binance will pay $4.3 billion in penalties and forfeitures.
“The message here should be clear: Using new technology to break the law does not make you a disrupter. It makes you a criminal,” U.S. Attorney General Merrick Garland said, appearing with U.S. Treasury Secretary Janet Yellen and other federal officials at press conference Tuesday afternoon in Washington, D.C.
Why was the case pursued in Seattle? For starters, the U.S. Attorney’s Office for the Western District of Washington in Seattle has a history of pursuing cyber crimes, including other crypto-related cases.
Legal jurisdiction was established in Seattle based on the presence in the district of servers and storage used by Binance, and traders here who unknowingly traded with people in sanctioned countries.
Speaking to reporters on the courthouse steps, Acting U.S. Attorney Tessa Gorman called it a “monumental day” in which the federal government was able to hold the world’s largest cryptocurrency exchange to account.
“It’s one of the largest fines the Department of Justice has ever had against a financial institution, and actually the first time the Department of Justice has reached a corporate resolution with a cryptocurrency exchange,” she said.
A reporter during the related press conference in Washington, D.C., asked Garland to address criticism that no one may go to jail in the case, and that Binance will be able to absorb the financial hit.
Garland deferred to Nicole Argentieri, the acting assistant attorney general for the DOJ’s Criminal Division, who defended the historic significance of the penalties against Binance, the stipulation for Zhao to step down, and the compliance monitoring requirements imposed as part of the settlement.
