Changpeng Zhao, former CEO of Binance, has resigned from his position after pleading guilty to anti-money laundering and sanctions violations charges brought by the US Department of Justice. The US$4 billion settlement reached between US agencies and the cryptocurrency exchange, founded by Zhao, mandated his departure as CEO of Binance.
The announcement of Changpeng Zhao’s resignation and the settlement was made on Tuesday by Zhao himself and various regulatory agencies. He also disclosed that Richard Teng, a Binance executive, would be stepping in as his successor as the company’s CEO.
Binance is one of the world’s largest and most prominent cryptocurrency exchanges. Founded in 2017 by Changpeng Zhao (CZ), it has become a key player in the blockchain and crypto space. Binance offers a wide range of services related to cryptocurrencies, including trading for hundreds of digital currencies, futures trading, staking, lending, and more.
Binance CEO Changpeng Zhao’s Resignation
On X, formerly Twitter, Zhao made a statement, “Today, I stepped down as CEO of Binance. Admittedly, it was not easy to let go emotionally. But I know it is the right thing to do. I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself.”
Changpeng Zhao’s resignation as CEO does not imply a complete disintegration of Binance. As the founder, CZ will retain a majority stake in the company and serve as a valuable resource for consultation on historical aspects of the business.
“As a shareholder and former CEO with historical knowledge of our company, I will remain available to the team to consult as needed, consistent with the framework set out in our U.S. agency resolutions,” reads tweet further.
Binance CEO Pleads Guilty, Faces Hefty Penalties
On Tuesday afternoon in federal court in Seattle, Zhao pleaded guilty to charges brought by the Department of Justice, admitting to anti-money laundering and sanctions violations as part of the settlement.
Binance, in addition to Changpeng Zhao’s resignation, has reached settlements with various regulatory bodies, including the Department of Justice (DOJ), the Commodities Futures Trading Commission, the Office of Foreign Assets Control (OFAC), and the Department of Treasury (FinCEN). Consequently, the Treasury Department will have access to Binance’s books and records for a five-year period.
As per Secretary Yellen, “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.”
Any breaches of US anti-money laundering rules by Binance could lead to accountability by the Treasury Department. The allegations include failure to prevent and disclose suspected transactions with terrorists, citing both Al Qaeda and ISIS. The settlement entails a US$3.4 billion fine to FinCEN and a US$968 million penalty to OFAC, along with five years of compliance obligations and monitoring.
In June, the SEC accused Binance and Zhao of operating an unlicensed exchange and deceiving investors by inflating trading volume on Binance’s U.S. platform through the use of a Swiss-based fund called Sigma Chain, owned by CZ.
Earlier in June this year, Zhao faced accusations from the SEC of misleading investors by artificially boosting trading volume on Binance’s U.S. platform through the use of a Switzerland-based fund named Sigma Chain.
What Next for Changpeng Zhao?
Zhao is gearing up for a well-deserved break, having worked tirelessly without a single day off for the past six and a half years.
Once recharged, he’s thinking about putting his money into startups dealing with blockchain, Web3, DeFi, AI, and biotech. He’s especially excited about focusing more on DeFi.
CZ isn’t planning to be a CEO of a startup again, but he does want to share his wisdom. He’s thinking about being a mentor for a few up-and-coming entrepreneurs on the down-low. He’s looking forward to seeing new leaders take charge and bring in fresh ideas.
On a positive note, he takes pride in emphasizing that in the resolutions reached with U.S. agencies, Binance stands clear of any allegations related to misappropriation of user funds or engaging in market manipulation.
These outcomes highlight the commitment to integrity and adherence to regulatory standards by the cryptocurrency exchange platform.
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