FinCEN Announces Largest Settlement in Treasury Department History

On Tuesday November 21, 2023, FinCEN announced the largest settlement in U.S. Treasury Department History with virtual currency exchanger Binance Holdings Ltd.

Binance, the largest virtual currency exchanger in the world, must pay approximately $4.3 billion in total to resolve violations of the Bank Secrecy Act (BSA), failing to register as a money transmitter, and sanctions violations. The settlement with FinCEN is part of a coordinated effort with OFAC, the U.S. Commodity Futures Trading Commission (CFTC), and the Department of Justice (DOJ).

According to the DOJ, the program failures are considered willful and a result of putting profit ahead of compliance. The 92-page FinCEN order and other documents break down the underlying facts, including concerns noted with KYC, training, appointing a qualified person to oversee the program, lack of SAR filings, and insufficient independent review.

The FinCEN settlement agreement specifically cites:

Binance operated for over a year with no AML program, and the AML program that it subsequently implemented was ineffective and contained categorical gaps. Binance personnel had actual knowledge that illicit activity was flowing through the platform as the result of deficient KYC procedures, yet several years elapsed before Binance took any steps to begin remediating these gaps. Binance’s willful failure to implement an effective AML program directly led to the platform being used to process transactions related to child exploitation material, ransomware attacks, darknet and other illicit marketplaces, unregistered convertible virtual currency mixing services used to launder illicit proceeds, high-risk jurisdictions, individuals listed on OFAC’s SDN List, terrorist financing, and stolen funds or other illicit proceeds. Binance’s willful failure to report to FinCEN hundreds of thousands of suspicious transactions inhibited law enforcement’s ability to disrupt the illicit actors.

The company’s CEO has stepped down after pleading guilting to failing to maintain an effective AML program and the former Chief Compliance Officer has also agreed to a $1.5 million fine with the CFTC for willfully evading US law and other violations.

If you’d like to learn more, you can find the full FinCEN settlement here.

The other organizations involved in the settlement also released statements, which you can find below:

You may also be interested in January 9th’s session, Strengthen & Optimize Your BSA/AML Program, with Lori Moore. In it, we’ll discuss how to implement ongoing, comprehensive risk assessments that will provide assurance that your BSA/AML program is as effective as possible in 2024.