Changpeng Zhao
, the founder of Binance, is pleading guilty to federal
money laundering
charges and has resigned from his position as CEO. The
US government
has reached a settlement with
Binance
and Zhao. Under the agreement, Binance will forfeit $2.5 billion and pay a fine of $1.8 billion, while Zhao, who is stepping down, will have to pay $50 million out of his pocket.
Richard Teng
, who is the head of regional markets at Binance, will replace Zhao as the new CEO.
As per the
settlement agreement
, Binance needs to appoint an independent compliance monitor to oversee the exchange’s operations.
“Today, I stepped down as CEO of Binance,” Zhao writes on X (formerly Twitter). “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.”
As part of the settlement, Zhao will not be allowed to have any involvement with Binance for the next three years. He will enter a guilty plea later today for violating the Bank Secrecy Act and causing a financial institution to do the same. However, despite losing his executive role, Zhao will retain his majority ownership of the world's largest
cryptocurrency
exchange, as per The Wall Street Journal.
In June, the
Securities and Exchange Commission
sued Binance and Zhao for operating illegally in the US and defrauding investors. The agency also tried to freeze Binance's assets due to its "violative conduct" in "disregard of the laws of the United States." However, Binance avoided the freeze by imposing several restrictions that prevented Binance and Zhao from accessing customer funds and other things.
According to the Justice Department, Binance deliberately violated economic sanctions and conducted transactions without the necessary controls mandated by US law. Court documents revealed that Binance facilitated almost $900 million in financial transactions that violated sanctions against Iran between 2018 and 2022 due to the lack of anti-money laundering measures.
“Because of the crimes committed, Binance became the largest cryptocurrency exchange in the world,” Merrick Garland, the US Attorney General, said during a press conference. “Now, Binance has paid one of the largest corporate penalties in US history.”
