Changpeng Zhao, founder and CEO of Binance, the world’s biggest cryptocurrency exchange, has resigned from his position and admitted to violating US anti-money-laundering regulations, agreeing to a settlement of $4.3 billion.
Under the terms of the agreement, Zhao is prohibited from holding a managerial role at the company for the next three years.
Attorney General Merrick B. Garland stated, “Binance’s rise to become the world’s largest cryptocurrency exchange was partly due to its illegal activities, leading to one of the largest corporate fines in U.S. history.”
Garland further noted, “In just the last month, we have successfully prosecuted the CEOs of two of the world’s biggest cryptocurrency exchanges in distinct criminal cases. The clear takeaway is that using innovative technology for illegal purposes doesn’t make one an innovator, but a criminal.”
Binance Settles with Largest Corporate Fine Globally
The resignation of Zhao, as part of a $4.3 billion settlement, concludes a prolonged investigation. The agreement includes Zhao’s personal payment of $50 million, one of the largest corporate penalties in U.S. history.
The Department of Justice (DOJ) commented, “This ranks among the most substantial penalties ever imposed on a corporate entity in a criminal case.”
Zhao admitted guilt in federal court in Seattle to charges of anti-money laundering and sanctions violations, as per the Department of Justice. Following this, Binance reached an agreement with the U.S. Department of Justice and the Commodities Futures Trading Commission.
Under the settlement, the company will be under a five-year monitorship, granting the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC) access to the company’s records. This arrangement aims to facilitate investigation into potential financial crimes and ensure regulatory compliance.
Authorities state that Binance violated U.S. anti-money laundering and sanctions laws and failed to report over 100,000 suspicious transactions with groups labeled as terrorist organizations by the U.S., including Hamas, al Qaeda, and the Islamic State of Iraq and Syria.
The DOJ added, “Binance’s non-compliance with U.S. laws facilitated criminals in laundering their illicit funds through the exchange.”
As part of the settlement, Binance is obligated to pay $1.81 billion within 15 months and forfeit an additional $2.51 billion.
New CEO Appointed
In the midst of these developments, Zhao revealed on X (formerly Twitter) the appointment of Richard Teng, a seasoned Binance executive, as the new CEO:
“I’m excited to share that @_RichardTeng, previously our Global Head of Regional Markets, has today been appointed as Binance’s new CEO.”
Binance highlights Richard’s extensive background in financial services and regulation, spanning over thirty years, as crucial for guiding the company’s forthcoming growth phase.
Before his time at Binance, Richard held notable positions such as the CEO of the Financial Services Regulatory Authority at Abu Dhabi Global Market; the Chief Regulatory Officer of the Singapore Exchange (SGX), and the Director of Corporate Finance at the Monetary Authority of Singapore.
Teng emphasizes that his primary goal will be to “ensure users maintain their confidence in the company’s financial stability, security, and safety.”