Changpeng Zhang is stepping down as Binance CEO and has pleaded guilty to the criminal charges brought against him. This development comes as part of a colossal $4.3 billion settlement with the US Department of Justice, bringing to a close a prolonged, multi-year investigation into the world’s largest cryptocurrency exchange, the result of a joint effort by the Department of Justice, the Commodity Futures Trading Commission and the Treasury Department.
The plea agreement involves Binance forfeiting a total of $2.5 billion, alongside a substantial fine amounting to $1.8 billion. Notably, Changpeng Zhao – also known as “CZ” himself faces a personal financial penalty of $50 million. “Today we are pleased to inform you that we’ve reached resolutions with the U.S. Department of Justice, Commodity Futures Trading Commission, the Office of Foreign Assets Control, and the Financial Crimes Enforcement Network related to their investigations into historical registration, compliance, and sanctions issues,” Binance noted in a blog post on the matter.
Zhao pleaded guilty on Tuesday at a federal court in Seattle, agreeing to resign from his post as the CEO of the major crypto exchange as part of the settlement with the DOJ. He announced the same in a post on X, adding that “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.” Going forward, he plans to take a break before perhaps getting more involved in investing. “I can’t see myself being a CEO driving a startup again. I am content being an one-shot (lucky) entrepreneur,” Zhao said. He has been released on a $175 million personal recognizance bond, and his sentencing hearing will take place on February 23.
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.
Binance is no longer a baby. It is…
— CZ 🔶 Binance (@cz_binance) November 21, 2023
The U.S. authorities had Binance on their radar for years, closely scrutinizing its operations and regulatory adherence. The Securities and Exchange Commission (SEC) had previously charged Binance and CZ with deceiving regulators about the platform’s operations, signaling the beginning of a series of legal woes for the crypto giant. The climax occurred when the U.S. Department of Justice (DOJ) decided to bring criminal charges against Binance and its CEO. The charges were multifaceted, encompassing allegations of conducting an unlicensed money-transmitting business, violating the International Emergency Economic Powers Act, and conspiracy. The crux of the charges lay in Binance’s failure to institute an effective anti-money laundering (AML) program, a clear violation of the Bank Secrecy Act. The exchange was accused of deliberately flouting U.S. economic sanctions, allegedly engaging in activities that facilitated almost $900 million in financial transactions in violation of sanctions against Iran between 2018 and 2022.
Treasury Secretary Janet Yellen, in a scathing indictment, accused Binance of enabling illicit actors to conduct over 100,000 transactions supporting terrorism, illegal narcotics, and criminal enterprises. The revelation that Binance facilitated transactions associated with notorious terrorist groups added a layer of severity to the charges. With Zhang stepping down after being charged of violating US economic sanctions and the Bank Secrecy Act, Richard Teng – the former global head of regional markets of Binance – has taken up the position of the new CEO of the major crypto exchange.