Washington

Cryptocurrency exchange platform Binance was used by Hamas and other terror groups to funnel funds, the US Treasury Department said, explaining reasons for charging the firm with money laundering accusations.

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The global trading platform was accused of violating anti-money laundering and sanctions laws and a $4.3 billion fine was slapped on it.

Consequently, CEO Changpeng Zhao resigned under a settlement deal with the Department of Justice.

In a Seattle court, Zhao pleaded guilty to the charges and agreed to step down immediately as its CEO.

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Settlement deal

Under the deal, Binance will pay out $1.81 billion within a timeline of 15 months, followed by another $2.51 billion forfeiture as part of the deal, prosecutors told Reuters.

Additionally, Binance also reached a settlement with the Treasury Department’s Financial Crimes Enforcement Network and the Office of Foreign Assets Control.

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In a statement, Treasury Department Secretary Janet Yellen said that the trading platform was used to facilitate money to terror groups like Hamas, Al Qaeda, and the Islamic State of Iraq and Syria (ISIS).

Binance had also failed to report more than 100,000 suspicious transactions with organizations designated as terrorist groups by the US.

“The violations include failure to implement programmes to prevent and report suspicious transactions with terrorists — including Hamas' Al-Qassam Brigades, Palestinian Islamic Jihad (PIJ), Al Qaeda, and the Islamic State of Iraq and Syria (ISIS).''

It accused Binance of turning a “blind eye to its legal obligations in the pursuit of profit,'' allowing ''money to flow to terrorists, cybercriminals, and child abusers through its platform.''

The Treasury Department claimed that the crypto giant also failed to prevent and report transactions with “ransomware attackers, money launderers, and other criminals,” as well as trades between users in the US and in countries sanctioned by the US government, including Iran, North Korea and Syria, as well as the Crimean peninsula, which was illegally annexed by Russia in 2014.

Binance was aware of the shady transactions 

The Hamas transactions were first acknowledged in February 2019 by Binance's then-chief compliance officer Samuel Lim, according to a Commodity Futures Trading Commission lawsuit filed in March against the crypto exchange.

Also read | Who is Changpeng Zhao, ex-Binance CEO who quit after pleading guilty to money laundering violations

Lim was informed about "HAMAS transactions," and responded by saying that terrorists often send "small sums" of money because "large sums constitute money laundering," the CFTC complaint said.

Also read | US slaps over $4 billion monetary penalty on Binance as CEO Changpeng Zhao pleads guilty

"Can barely buy an AK-47 with 600 bucks," the colleague replied, as per the complaint.

The complaint, quoting the messages between Lim and his staff, noted that Binance was aware of the illegal transactions being made through its services.

(With inputs from agencies)