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The U.S. government dealt a massive blow to Binance, the world’s largest cryptocurrency exchange, which agreed to pay a roughly $4 billion settlement Tuesday as its founder and CEO Changpeng Zhao pleaded guilty to a felony related to his failure to prevent money laundering on the platform. 

Zhao stepped down as the company’s chief executive, and Binance admitted to violations of the Bank Secrecy Act and apparent violations of sanctions programs, including its failure to implement reporting programs for suspicious transactions. 

“Using new technology to break the law does not make you a disruptor, it makes you a criminal,” said U.S. Attorney General Merrick Garland, who called the settlement one of the largest corporate penalties in the nation’s history. 

As part of the settlement agreement, the U.S. Treasury said Binance will be subject to five years of monitoring and “significant compliance undertakings, including to ensure Binance’s complete exit from the United States.” Binance is a Cayman Islands limited liability company. 

The cryptocurrency industry has been marred by scandals and market meltdowns. 

Rival of FTX founder

Zhao was perhaps best known as the chief rival to Sam Bankman-Fried, the 31-year-old founder of FTX, which was the second-largest crypto exchange before it collapsed last November. Bankman-Fried was convicted earlier this month of fraud for stealing at least $10 billion from customers and investors. 

Zhao, meanwhile, pleaded guilty in a federal court in Seattle on Tuesday to one count of failure to maintain an effective anti-money-laundering program. 

Magistrate Judge Brian A. Tsuchida questioned Zhao to make sure he understood the plea agreement, saying at one point: “You knew you didn’t have controls in place.” 

“Yes, your honor,” he replied. 

Binance wrote in a statement that it made “misguided decisions” as it quickly grew to become the world’s biggest crypto exchange, and said the settlement acknowledges its “responsibility for historical, criminal compliance violations.” 

U.S. Treasury Secretary Janet Yellen said Binance processed transitions by illicit actors, “supporting activities from child sexual abuse to illegal narcotics, to terrorism, across more than 100,000 transactions.” 

Binance did not file a single suspicious activity report on those transactions, Yellen said, and the company allowed more than 1.5 million virtual currency trades that violated U.S. sanctions, including ones involving Hamas’ al-Qassam Brigades, al-Qaida and other criminals. 

The judge set Zhao’s sentencing for February 23, however it’s likely to be delayed. He faces a possible guideline sentence range of up to 18 months. 

One of his attorneys, Mark Bartlett, noted that Zhao had been aware of the investigation since December 2020, and surrendered willingly even though the United Arab Emirates — where Zhao lives — has no extradition treaty with the U.S. 

“He decided to come here and face the consequences,” Bartlett said. “He’s sitting here. He pled guilty.” 

Zhao, who is married and has young children in the UAE, promised he would return to the U.S. for sentencing if allowed to stay there in the meantime. 

“I want to take responsibility and close this chapter in my life,” Zhao said. “I want to come back. Otherwise I wouldn’t be here today.” 

Company sent investor assets to third party

Zhao previously faced allegations of diverting customer funds, concealing the fact that the company was commingling billions of dollars in investor assets and sending them to a third party that Zhao also owned. 

Over the summer, Binance was accused of operating as an unregistered securities exchange and violating a slew of U.S. securities laws in a lawsuit from regulators. That case was similar to practices uncovered after the collapse of FTX. 

Zhao and Bankman-Fried were originally friendly competitors in the industry, with Binance investing in FTX when Bankman-Fried launched the exchange in 2019. However, the relationship between the two deteriorated, culminating in Zhao announcing he was selling all of his cryptocurrency investments in FTX in early November 2022. FTX filed for bankruptcy a week later. 

At this trial and in later public statements, Bankman-Fried tried cast blame on Binance and Zhao for allegedly orchestrating a run on the bank at FTX. 

A jury found Bankman-Fried guilty of wire fraud and several other charges. He is expected to be sentenced in March, where he could face decades in prison. 
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Argentina’s stock market reacted with optimism Tuesday to the resounding election win by libertarian Javier Milei, despite the country being gripped by uncertainty over what changes the self-described “anarcho-capitalist” will bring.

Milei, a 53-year-old economist who has vowed to scrap multiple government departments and sometimes campaigned by waving a chainsaw from the stage, trounced Argentina’s long-dominant Peronist coalition as voters punished the government for decades of economic decline.

Latin America’s third-biggest economy is creaking under annual inflation of 143%.

Monday, the day after the election, was a public holiday in Argentina, delaying the market reaction. But immediately Tuesday, the stock market opened 20%, before easing off to gains of about 14%.

Argentina’s peso is strictly controlled, and the informal “blue dollar” exchange rate — seen as a barometer of panic in the country — reacted with moderation, rising slightly to 1,050 pesos to the dollar.

Milei has vowed to ditch the peso for the US dollar and shut down the central bank — which he accused of rampant money printing to finance government overspending — in a bid to halt inflation.

During his campaign he said he would slash state spending and ditch about 10 government ministries, among other controversial proposals.

However, he later toned down some of his rhetoric, leaving great uncertainty over his actual plans.

In his first interviews on Monday after the election, Milei warned it would take up to two years to tame inflation and laid out his plans to reform the state.

Milei said, “Everything that can be in the hands of the private sector is going to be in the hands of the private sector,” including the state oil company YPF and state media.

The rise on Argentina’s stock market was led by state oil company YPF, whose shares rose 34% after Milei’s remarks.

On Monday, YPF shares listed on Wall Street were up 40% at closing.

Milei on Monday held his first meeting with outgoing President Alberto Fernandez to coordinate the transition ahead of his inauguration on December 10.
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Iranian lawmakers have approved legislation raising the retirement age for men to 62 and increasing the years of employment required to qualify for a full pension, state media reported.

The bill, which requires approval by the Guardian Council, a conservative-dominated vetting body, aims “to reduce pension fund shortfalls,” according to the official IRNA news agency.

In Sunday’s vote in the 290-seat parliament, 127 lawmakers voted in favor, 78 against and eight abstained, with the remainder absent.

The speaker of parliament, Mohammad Baqer Qalibaf, said on Monday that male employees would have to work 35 years, instead of 30, before they can retire with a full pension, according to IRNA.

He said the retirement age for men would be raised from 60 to 62, but for women it would remain at 55.

Labor Minister Solat Mortazavi said the move was necessary to ensure that pension funds could continue to meet their obligations to beneficiaries.

In recent months, several officials have spoken out about severe shortfalls in pension funds, with then Labor Ministry official Sajjad Padam saying in May that Iran “might be forced to sell” territory to pay pensioners.

Padam was sacked shortly after his controversial remark.

Iran has been reeling from a crippling economic crisis marked by inflation of around 50% and a sharp depreciation of the rial against the dollar.

The crisis has been aggravated by U.S. sanctions reimposed in 2018 following Washington’s withdrawal from a landmark nuclear deal between Tehran and major powers.
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Kenya is struggling to repay a massive debt owed to China for the construction of the Standard Gauge Railroad that links the Kenyan cities of Mombasa and the capital, Nairobi. But President William Ruto is asking for an additional billion-dollar loan from China to complete some other stalled development projects in the country. Kennedy Wandera has more from Nairobi. Camera: Jimmy Makhulo
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