The founder and CEO of Binance, Changpeng Zhao, has stepped down and pleaded guilty to violating U.S. anti-money laundering laws. This comes as part of a $4.3 billion settlement to resolve a lengthy investigation into the world’s largest cryptocurrency exchange. The settlement, which includes multiple U.S. agencies, addresses charges of conducting an unlicensed money transmitter business, conspiracy, and breaching sanctions regulations.
Zhao’s resignation and guilty plea raise uncertainty about his future. In a tweet, he acknowledged the difficulty of letting go emotionally but recognized that stepping down was the right thing to do. He takes responsibility for his mistakes and will personally pay $50 million. Additionally, he is barred from any involvement with Binance.
Prosecutors are seeking an 18-month prison sentence for Zhao, according to the New York Times. However, his sentencing remains uncertain, and Zhao and his lawyers have not commented on the matter.
Zhao, also known as CZ, had ambitious plans for Binance. Since its launch in Shanghai in 2017, he desired to dominate the entire market. Despite the recent setback, Zhao remained steadfast in his belief and continued building up the crypto exchange. In a review of the previous year, he expressed confidence that Binance could operate at the same level as traditional financial institutions.
However, Tuesday’s guilty plea and settlement have dashed Zhao’s aspirations. U.S. Attorney General Merrick Garland criticized Binance for failing to comply with U.S. law and making it easy for criminals to move illicit funds on its exchanges. Garland also accused Binance of pretending to comply with federal law.
Born in China, Zhao moved to Canada at a young age. He pursued success globally, working in Tokyo and New York before settling in Shanghai and founding Binance. The exchange quickly became the world’s largest within six months, although its market share has declined this year.
Despite Binance’s growth, Zhao maintained tight control over the company. He surrounded himself with a select group of associates, many with ties to China. As CEO, he remained involved in minute operational details while also networking with world leaders and city mayors on social media.
It remains unclear whether Zhao will relinquish control of the many entities associated with Binance. In the meantime, Richard Teng, a senior Binance executive, has been appointed as the new CEO. Zhao expressed confidence that Teng will lead Binance into its next phase of security, transparency, compliance, and growth.
The news of Zhao’s resignation and guilty plea has sent shockwaves through the crypto community, raising questions about the future of Binance and the broader cryptocurrency industry.
