Changpeng Zhao, the founder and CEO of the world’s largest cryptocurrency exchange Binance, has stepped down from his role and pleaded guilty to breaking the US anti-money-laundering laws, as a part of a $4.3B settlement.
Additionally, Zhao is not allowed to take on a management position in the company for the next three years, as a part of the deal.
“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed – now it is paying one of the largest corporate penalties in U.S. history,” says Attorney General Merrick B. Garland.
“In just the past month, the Justice Department has successfully prosecuted the CEOs of two of the world’s largest cryptocurrency exchanges in two separate criminal cases. The message here should be clear: using new technology to break the law does not make you a disruptor, it makes you a criminal,” adds Garland.
Binance pays world’s biggest corporate penalty
Zhao’s resignation comes as a part of a $4.3B settlement resolving a years-long probe. The deal will also see Zhao personally pay $50M, described as one of the largest corporate penalties in US history.
“This is one of the largest penalties we have ever obtained from a corporate defendant in a criminal matter,” says the DOJ.
Zhao appeared in federal court in Seattle on Tuesday afternoon and pleaded guilty to anti-money laundering and sanctions violations brought by the Department of Justice.
Consequently, Binance recently reached a settlement with the US Department of Justice and Commodities Futures Trading Commission.
The crypto exchange has agreed to a five-year monitorship, which will give the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC) access to Binance’s books and records.
This will enable the authorities to investigate any potential financial crimes and ensure compliance with regulations.
Binance broke the US anti-money laundering and sanctions laws and failed to report more than 100,000 suspicious transactions with organisations the US described as terrorist groups, including Hamas, al Qaeda, and the Islamic State of Iraq and Syria, says authorities.
“By failing to comply with US law, Binance made it easy for criminals to move their stolen funds and illicit proceeds on its exchange,” adds DOJ.
The world’s largest cryptocurrency will pay $1.81B within 15 months, and a further $2.51B forfeiture as part of the settlement.
Appoints new CEO
Meanwhile, Zhao announced the appointment of Richard Teng, a longtime Binance executive, as the CEO. He took X (previously Twitter) to make the announcement:
“I’m pleased to announce that @_RichardTeng, our now former Global Head of Regional Markets, has been named the new CEO of Binance today.”
Richard has over three decades of financial services and regulatory experience and will navigate the company through its next period of growth, says Binance.
Prior to joining Binance, Richard was 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 says that his focus would be on “reassuring users that they can remain confident in the financial strength, security and safety of the company.”