Changpeng Zhao, one of the biggest figures in the cryptocurrency world and CEO of Binance, has resigned and pleaded guilty to violating US anti-money laundering laws as part of a substantial $4.3 billion settlement, resolving a lengthy investigation into the world’s largest cryptocurrency exchange.
This resolution with the Justice Department, forming part of a broader settlement involving various U.S. agencies, addresses criminal charges related to operating an unlicensed money transmitter business, conspiracy, and breaching sanctions regulations.
In a tweet, Zhao, widely known as CZ, acknowledged his resignation, stating, “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.” As part of the settlement, Zhao is personally paying $50 million and is prohibited from any involvement with Binance.
The uncertainty surrounding Zhao’s future is heightened by U.S. sentencing guidelines, which suggest a prison term of 10 to 18 months for the charges he faces. Prosecutors are reportedly seeking an 18-month prison sentence.
Changpeng Zhao, with the moniker CZ, founded Binance in Shanghai in 2017 and quickly became a significant player in the crypto space. Despite the recent setback, Zhao had been vocal about Binance’s ambitions, stating earlier this year that the platform aimed to operate at the same level as financial institutions that had been around for centuries.
Zhao’s guilty plea and the resulting settlement represent a stark contrast to Binance’s earlier claims of progress in global regulatory compliance. The company had emphasized its commitment to strengthening client checks and building the best security and compliance team in the crypto industry.
Born in China and later moving to Canada, Zhao’s global journey included stints in Tokyo and New York before establishing Binance in Shanghai. The exchange’s rapid expansion made it the world’s largest crypto exchange within six months.
Despite the recent challenges, Binance, which still accounts for about half of global crypto trading volumes, has appointed Richard Teng, a senior executive who joined in 2021, as the new CEO. Zhao expressed confidence that Teng would lead Binance through the next phase of security, transparency, compliance, and growth. The extent to which Zhao will retain control over the numerous entities associated with Binance remains unclear.
(With inputs from agencies)
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