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Enforcement Release: NOVEMBER 21, 2023
OFAC Settles with Binance Holdings, Ltd. for $968,618,825 Related to Apparent Violations of Multiple Sanctions Programs
Binance Holdings, Ltd. (“Binance”), a Cayman Islands virtual currency exchange with affiliates around the world, has agreed to pay $968,618,825 to settle its potential civil liability for 1,667,153 apparent violations of multiple sanctions programs administered by the Office of Foreign Assets Control (OFAC). For over five years, between August 2017 and October 2022, Binance matched and executed virtual currency trades on its online exchange platform between U.S. person users and users in sanctioned jurisdictions or blocked persons. Although Binance took steps to project an image of compliance, including by misleading third parties about its controls, senior Binance management knew of and permitted the presence of both U.S. and sanctioned jurisdiction users on its platform, and did so despite understanding that Binance’s trade matching algorithm could...
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1) The Binance case is global settlement involving OFAC, FinCEN, the CFTC and the DOJ requiring Binance to pay over $4.3 billion in criminal forfeiture, penalties, and fines. (See Plea Agreement & Statement of Facts - Binance Holdings, Ltd. For the FinCEN and CFTC actions, see https://www.fincen.gov/sites/default/files/enforcement_action/2023-11-21/FinCEN_Consent_Order_2023-04_FINAL508.pdf and https://www.cftc.gov/media/8351/%20enfbinancecomplaint032723/download). The OFAC penalty, while nominally being the second highest ever levied, behind Civil Enforcement Information - BNP Paribas SA, was mostly “deemed satisfied” by payments in satisfaction of Binance’s obligations under its plea agreement with the DOJ. But see section IV of Settlement Agreement (OFAC) - Binance Holdings, Ltd. (OFAC imposing unusually harsh conditions and an “in-case-of-breach” provision).
2) NOVEL “SERVICE” AND “CAUSING” INTERPRETATIONS; IMPLICATIONS FOR OTHER TYPES OF TRADING PLATFORMS
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