As part of a major $4 billion settlement between the US and the Binance CEO CZ steps down. The announcement from Zhao and multiple regulatory agencies on Tuesday capped yearslong investigations by the Department of Justice and others into anti-money laundering violations and sanctions violations.
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Binance CEO CZ steps down
“I made mistakes, and I must take responsibility,” Zhao wrote in a post to X, the platform formerly known as Twitter. “This is best for our community, for Binance, and for myself.”
In a press statement, Binance said it would take responsibility for not having appropriate compliance controls.
“When Binance first launched, it did not have compliance controls adequate for the company that it was quickly becoming, and it should have.”
Zhao’s departure as CEO, will not be a complete separation from Binance. The company’s founder will remain its majority shareholder and a resource for “consultation on historical areas of the business,” the company said.
New CEO of Binance
Binance executive Richard Teng has succeeded Zhao as CEO.
Zhao’s Charges
As part of the settlement, 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.
Additionally, Binance settled charges with the DOJ, FinCEN, and OFAC, which will give the Treasury Department access to Binance’s books and records under the terms of a five-year monitorship. “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 on Tuesday. “Now, Binance has paid one of the largest corporate penalties in US history.”
The Treasury Department said in a statement that it had taken “unprecedented action” to hold Binance accountable for violations of U.S. anti-money laundering laws. It alleged that Binance had failed to prevent and report “suspicious transactions with terrorists,” citing both Al Qaeda and ISIS.
Settlement with Penalty
The settlement comes with a $3.4 billion penalty to FinCEN and $968 million to OFAC, as well as compliance requirements and monitoring for a period of five years. “Binance turned a blind eye to its legal obligations in the pursuit of profit.
SEC charges on Binance and Zhao
Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform,” Treasury Secretary Janet Yellen during a press conference.
The SEC previously charged Binance and Zhao in June with operating an unregistered exchange and misleading investors by using a Switzerland-based fund Sigma Chain, which was also owned by CZ, to inflate the trading volume on Binance’s U.S. platform.
“Through thirteen charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law,” SEC chair Gary Gensler said in June.
The case is ongoing. The SEC declined to comment.
BNB Price Drop
In response to the initial news, BNB experienced a decline of up to 9%, eventually stabilizing to around a 5% drop by midafternoon. Currently, the price is recovering and is at $232.71 at the time of writing.
But apart from this here’s what people are saying and supporting CZ
Thank you for your service CZ. pic.twitter.com/hgFPxgCxJA
— Farokh (@farokh) November 21, 2023
CZ! You are one of the great heroes on the front lines of an epic struggle. You should be immensely proud of Binance.
— Erik Voorhees (@ErikVoorhees) November 21, 2023
Well done ser, and thank you. #EndTheFed
Conclusion
To conclude, as a part of the $4 billion settlement, Binance CEO CZ steps down and Richard Teng joins as the new CEO of Binance. The investors and the crypto market hopes for a better future for Binance with the settlement.
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