Binance CEO Changpeng Zhao pleaded guilty to US money laundering charges|Web Summit|CC BY 2.0
It seems like a bad time to lead crypto firms. Cofounder and CEO of Binance, the world’s largest cryptocurrency exchange, Changpeng Zhao (CZ), stepped down and pleaded guilty to money laundering violations in the US, according to court documents released yesterday.
According to the settlement between Binance and the DOJ, the crypto exchange will reportedly pay $4.3 billion but will continue operating.
CZ will not face jail time as part of the guilty plea and will pay $50 million of the $4.3 billion settlement.
The financial settlement stems from the CFTC lawsuit filed in March, alleging CZ and his firm knowingly evaded American laws by
- Not verifying its customers’ identities before trading, allowing customers from sanctioned countries by the US to trade on the platform.
- Not setting basic compliance procedures in place to prevent terrorist funding and money laundering.
As a result, nearly $899 million was traded between Americans and users in Iran between January 2018 and May 2022.
What happens to Binance?
Richard Teng, the Global Head of Regional Markets, is the new CEO of Binance. The company can continue operating in the US.
CZ congratulated Teng in an X post and indicated that he is still a shareholder in the company.
However, the plea deal prohibits him from operating or managing the business for three years.
Binance and CZ have another lawsuit to face. The SEC sued them in June, alleging multiple securities violations, including lying to investors, as well as regulators and misusing customer funds.