As Prepared for Delivery
Good afternoon. I’m very glad to join Attorney General Garland, Deputy Attorney General Monaco, and CFTC Chairman Behnam for such an important occasion.
We’re here today to announce the Treasury Department’s historic action—the largest enforcement action in Treasury’s history—against Binance—the world’s largest virtual currency exchange—for its consistent and egregious violations of U.S. anti-money laundering and sanctions laws.
Protecting the U.S. financial system, and through that, the global financial system, is core to the Treasury Department’s mission. And, ever since Binance launched its convertible virtual currency platform, it has knowingly evaded the U.S. laws designed to protect these systems.
Over more than three years, FinCEN, OFAC, and IRS Criminal Investigation thoroughly investigated key aspects of Binance’s activities. Our work revealed that Binance claimed to have exited the U.S. market years ago, but actually did not, retaining U.S. users and other significant ties with the United States. It also had critical gaps in its anti-money laundering program and practices, from a lack of risk-based procedures for various offerings to instructing staff to withhold information from law enforcement. It deliberately undermined its own sanctions monitoring controls, and it failed to report suspicious transactions.
This meant Binance was allowing illicit actors to transact freely, supporting activities from child sexual abuse, to illegal narcotics, to terrorism, across more than 100,000 transactions. That includes transactions associated with terrorist groups like Hamas’s Al-Qassam Brigades, Palestinian Islamic Jihad, Al Qaeda, and ISIS. Binance processed these transactions, but it never filed a single suspicious activity report. And it also allowed over 1.5 million virtual currency trades that violated U.S. sanctions.
So, we have taken the largest enforcement action in Treasury’s history. FinCEN’s settlement agreement assesses a penalty of $3.4 billion. OFAC’s settlement agreement assesses a penalty of nearly $1 billion.
Binance is also required to report the suspicious transactions it has failed to report to date and to establish an effective anti-money laundering program to support the global AML/CFT regime. And the settlement agreements subject Binance to increased scrutiny for five years through a third-party monitor, overseen by FinCEN, who will ensure Binance’s complete exit from the United States. The monitor will be able to access Binance’s systems, transactions, and accounts and will review and report on all actions included in the settlement agreements. Failure to live up to these obligations could expose Binance to substantial additional penalties.
The result of these agreements will be an end to company behavior that has posed risks to the U.S. financial system, U.S. citizens, and our country’s national security for too long.
And let me be clear: We are also sending a message to the virtual currency industry more broadly, today and for the future.
If virtual currency exchanges and financial technology firms wish to realize the tremendous benefits of being part of the U.S. financial system and serving U.S. customers, they must play by the rules. And if they do not, the U.S. government will take action.
Today’s announcement shows that Treasury is prepared to use its all of its tools to carry out its crucial mandate of combatting illicit finance and protecting the U.S. financial system. This will make all of us safer.
I want to end by thanking FinCEN, OFAC, and IRS Criminal Investigation employees, who play a central role in protecting our national security. Adequate resourcing was critical to carrying out this work. Thank you also to the partner agencies here today for such effective collaboration.
With that, I’ll turn the floor over to Deputy Attorney General Monaco.