A new class action lawsuit has been filed against Binance in the U.S. Western District Court of Washington, accusing the cryptocurrency exchange and its founder, Changpeng Zhao, of enabling widespread money laundering and violating U.S. financial regulations. The lawsuit, initiated by former users Philip Martin, Natalie Tang, and Yatin Khanna, claims that Binance's negligent compliance practices allowed bad actors to exploit the platform for laundering stolen crypto, resulting in substantial financial harm to U.S. users.
Key Highlights:
This class action follows a series of legal challenges faced by Zhao and Binance. In November 2023, the exchange reached a plea agreement with the U.S. Department of Justice, where Zhao admitted to failing to maintain an effective AML program. As part of that settlement, Binance agreed to pay over $4 billion in penalties, and Zhao stepped down as CEO, receiving a personal fine of $50 million for his role in the company's violations.Read more at Decrypt.
- The complaint details how Binance operated under Zhao’s leadership as an unlicensed money-transmitting business, allegedly ignoring anti-money laundering (AML) requirements and facilitating transactions that obscured the origins of illicit funds. The plaintiffs assert that Binance's rapid rise to becoming the world’s largest crypto exchange was fueled by its deliberate evasion of U.S. regulations, which would have otherwise limited its access to the lucrative American market.
- The lawsuit further alleges that Zhao prioritized profits over legal compliance, creating an environment where U.S. users were encouraged to bypass the platform’s minimal compliance checks. The plaintiffs contend that Binance’s failure to implement robust AML and Know Your Customer (KYC) protocols transformed the exchange into a hub for laundering crypto, often derived from hacks and other illicit activities.
