Binance Hit with $4.3 Billion Settlement for Violating AML Laws

Charges Revealed Against Binance by U.S. Department of Justice

The U.S. Department of Justice (DOJ) has unveiled charges against cryptocurrency exchange giant Binance Holdings Limited, resulting in a significant $4.316 billion settlement. The settlement comes as a result of Binance's noncompliance with anti-money laundering (AML) laws. Despite Binance's previous claims in 2019 to block U.S. users, prosecutors argue that the company continued to provide market access to elite American patrons, who accounted for approximately one-third of the company's trading revenue.

Shockwaves in the Crypto Sphere

The crypto sphere is still reeling from the repercussions of the DOJ's seismic settlement with Binance, as well as the involvement of the U.S. Treasury and Commodity Futures Trading Commission (CFTC). The settlement, amounting to $4.3 billion, is the result of allegations that Binance knowingly evaded registration as a money services business. According to court documents, Binance and its former CEO Changpeng Zhao (CZ) violated AML laws and the Bank Secrecy Act, among other regulations.

Binance's VIP Clientele

The charges also shed light on Binance's practice of maintaining a steady stream of VIPs from the U.S., despite claiming to no longer serve U.S. customers after the establishment of Binance US. The court documents reveal that high-net-worth individuals significantly contributed to the exchange's revenue. Binance was accused of retaining a substantial portion of its user base on Binance.com, particularly focusing on U.S.-based VIPs and trading firms that made markets on the platform.

The court filing states, "Although Binance announced it would block U.S. users and establish a separate exchange that would serve the U.S. market, Binance retained a substantial portion of its user base on Binance.com, with a particular focus on U.S.-based VIPs, including trading firms that made markets on Binance.com."

Clandestine Communication and VIP Handling

According to sealed court documents from November 14, 2023, Binance's ex-CEO CZ was informed in June 2019 that the exchange had 3,500 American VIP users, with 11,000 whale clients accounting for 70% of Binance's trading volume. U.S. VIPs constituted about one-third of this lucrative bracket. CZ and three other Binance executives then devised strategies to secretly retain U.S.-based VIP users through direct phone communication.

An unnamed informant mentioned in the court filing revealed that Binance executives referred to American patrons as "miscategorized" and provided an internal "VIP handling" guidebook for managing these elite spenders. The guidebook reportedly instructed employees to open accounts for privileged users without requiring any U.S. documentation, thus ensuring user confidentiality. By 2020, the DOJ alleges that Binance still had a significant number of U.S.-based clients, although they were labeled as "unknown."

KYC Regulations and Monitoring Transactions

In August 2021, Binance publicly stated that all users complied with know-your-customer (KYC) regulations. However, the DOJ claims that a higher tier of customers who did not submit KYC documentation were exempt until May 2022. During this time, Binance allegedly did not systematically monitor transactions on the platform. Although the court document does not mention the specific VIPs or market makers, it provides insight into the influence and impact of cryptocurrency whales in the industry.

What are your thoughts on the details surrounding Binance's VIP customers? Share your opinions in the comments section below.

Frequently Asked Questions

Can I store my Gold IRA at Home?

An online brokerage account will allow you to invest in the most secure way possible. You can access all of the same investment options that you would have if you worked with a traditional broker but don’t need to be licensed or qualified. You don’t have to pay any fees for investing.

You can also use free tools offered by many online brokers to manage your portfolio. Online brokers will allow you to download charts so that you can see the performance of your investments.

How to open a Precious Metal IRA

An IRA to hold precious metals can be opened by opening a Roth Individual Retirement Account (IRA) that is self-directed.

This type of account is superior to other types of IRAs in that you don’t pay any taxes on the interest earned from your investments, until you withdraw them.

This makes it very attractive to people who want to save money but also need a tax break.

You are not restricted to investing only in gold or silver. If it meets the IRS guidelines, you can invest in any asset that interests you.

Most people associate “precious” metal with gold or silver, but there are many different types of precious metals.

You can find examples in palladium (platinum), rhodium (osmium), iridium and ruthenium.

You can invest in precious and base metals in many different ways. The two most popular options include buying bullion coins and bars and purchasing shares of mining companies.

Bullion Coins and Bars

Buying bullion coins and bars is one of the easiest ways to invest in precious metals. Bullion refers to physical ounces (or grams) of gold and/or silver.

Bullion bars and bullion coin are real pieces of metal.

While you may not immediately see any change after buying bullion coins and bars in a store, there will be some long-term benefits.

For example, you’ll get a piece of history in a tangible form. Every coin and every bar has a unique story.

You’ll often find that the face value of a coin is far lower than its nominal value. For example, in 1986 the American Eagle Silver Coin sold for $1.00 an ounce. The price of an American Eagle is now closer to $40.00 a ounce.

Many investors prefer bullion coins and bullion bar to futures contracts because of the dramatic increase in bullion’s value.

Mining Companies

A great way to get precious metals is by investing in shares in mining companies. You invest in the company’s ability produce gold and silver when you buy shares of mining companies.

You will be paid dividends that are based on the company’s profits. These dividends are then used to pay shareholders.

You will also benefit from the company’s growth potential. The share prices of the company should rise as more people buy the product.

You should diversify because these stocks have a tendency to fluctuate in their prices. This is how you spread your risk across different companies.

However, it’s also important to remember that mining companies aren’t immune to financial loss, just like any stock market investment.

If gold prices plummet significantly, ownership of your shares could be worthless.

The Bottom Line

Precious metals like gold and silver can provide safety during economic uncertainty.

However, both gold and silver are subject to wild swings in price. You might be interested in long-term investments in precious metals. Consider opening a precious metals IRA with a reputable company.

This way, you can take advantage of tax advantages while benefiting from owning physical assets.

How can I choose an IRA?

Understanding your account type is the first step to finding the best IRA. This includes whether you are looking for a traditional IRA or Roth IRA. Also, you should know how much money is available for investment.

The next step is determining which provider fits your situation best. Some providers offer both accounts, while others specialize in just one type.

The fees associated with each option should be considered. Fees may vary from one provider to another and could include annual maintenance fees as well. A monthly fee may be charged by some providers depending on how many shares your company holds. Others charge only once per quarter.

How does a gold IRA generate interest?

It all depends on how much you invest in it. If you have $100,000 then yes. If your net worth is less than 100,000, no.

The amount you deposit into an IRA will affect its potential to earn interest.

If you invest more than $100,000 each year in retirement savings, you may want to open a regular brokerage instead.

While you may earn more interest there than elsewhere, you are also exposed to more risky investments. It’s not a good idea to lose all of the money you have invested in the stock exchange.

An IRA may be better for you if your annual income is less than $100,000. At least until the market starts growing again.

Are gold and Silver IRAs a good idea or a bad idea?

This could be a good option for anyone looking to quickly invest in both silver or gold. There are other options as well. If you have any questions regarding these types of investments, please feel free to contact us anytime. We are always here to help!

Statistics

You can only purchase gold bars of at least 99.5% purity. (forbes.com)
SEP-IRA”Simplified employee pension” For self-employed people like independent contractors, freelancers, and small-business ownersSame tax rules as traditional IRASEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less4. (sltrib.com)
If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal so that you would owe income tax on the item’s value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
Silver must be 99.9% pure • (forbes.com)

External Links

How To

How to Buy Gold for Your Gold IRA

A term that describes precious metals is gold, silver and palladium. It refers only to elements with atomic number 79-110 (excluding helium). These elements are considered valuable because they are rare and beautiful. Precious metals that are most commonly used include silver and gold. Precious metals are used in jewelry, money, industrial goods and art objects.

Gold prices fluctuate daily because of supply and demande. There has been a significant demand for precious metals over the past decade as investors look for safe havens in unstable economies. This has resulted in a substantial rise in the prices. Some people are concerned about investing in precious metals due to the rising cost of production.

Because gold is rare and durable, it makes a good investment. The value of gold is never lost, which is unlike many other investments. You can also buy and sell gold, without having to pay taxes. There are two methods to invest gold. There are two ways to invest in gold: buy gold bars and coins; or, you can invest directly in gold futures.

In-dispute liquidity can be achieved with physical gold bars or coins. They are easy for you to store and trade. They don’t provide much protection against inflation. Consider purchasing gold bullion if you want to be protected from rising prices. Bullion is physical gold that comes in different sizes and shapes. Many billions come as one-ounce pieces while others are larger like kilobars. Bullion is stored in vaults that are protected against theft and fire.

You might prefer to own shares of gold than actual gold. If so, then you should look into buying futures gold. Futures give you the opportunity to speculate about what might happen to gold’s value. You can purchase gold futures to get exposure to the gold price, but not the actual commodity.

For instance, if my goal was to speculate on the movement of the gold price, I could purchase a contract. My position will change when the contract expires. It can be either “longer” or “shorter.” A long contract means I believe the gold price will rise, so I am willing to hand over money now in return for the promise of more money when the contract expires. On the other hand, a short contract means that I think the price of gold will drop. I’m willing now to accept the money in exchange for the promise of making less later.

I’ll get the contract’s specified amount of gold plus interest when it expires. I am now exposed to the price of gold, without actually holding it.

Precious metals are great investments because they’re extremely hard to counterfeit. Paper currencies can be easily faked by printing new bills. Precious metals are not easy to counterfeit. Precious metals have held their value over the years because of this.

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By: Jamie Redman
Title: Binance Hit with $4.3 Billion Settlement for Violating AML Laws
Sourced From: news.bitcoin.com/binances-american-vips-a-revealing-look-at-high-net-worth-influence-amid-doj-settlement/
Published Date: Wed, 22 Nov 2023 19:00:42 +0000

The post Binance Hit with $4.3 Billion Settlement for Violating AML Laws appeared first on Gold and Altcoin IRA News and Reviews.