The CEO of the world’s largest cryptocurrency exchange Binance Changpeng Zhao resigned on 21 November 2023, the company announced on its blog.
He also pleaded guilty to anti-money laundering and sanctions violations in a federal court and agreed to pay a 50-million-dollar fine to cease criminal investigations by U.S. regulatory agencies against himself and the company.
As part of the settlement, Binance shall also pay 4.3 billion dollars in penalties, ending years long disputes with the Securities and Exchange Commission, the Department of Justice, the Commodities Futures Trading Commission, the Financial Crimes Enforcement Network (FinCEN), the Office of Foreign Assets Control (OFAC), and the Treasury Department.
Treasury Secretary Janet Yellen stated on the result, "Binance turned a blind eye to its legal obligations in the pursuit of profit, allowing money to flow to terrorists, cybercriminals, and child abusers through its platform."
Binance did not file a single suspicious activity report on any of the 100,000+ transactions, Yellen was quoted as saying by AP, and the company allowed over 1.5 million virtual currency trades that violated U.S.
sanctions — including ones involving Hamas, ISIS, al-Qaeda, and other criminal groups.
Binance acknowledged its failure to implement adequate compliance controls during its initial launch and accepted responsibility for this shortcoming. Expressing regret for the lapses, Zhao stated in a post on X (formerly Twitter), "I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself."
Zhao, also known as CZ, traveled to the U.S. from the United Arab Emirates, where he currently lives, in order to stand before the American regulatory machine and make a deal with the government.
Despite stepping down as CEO, Zhao will remain the majority shareholder of Binance and serve as a resource for consultation on strategic aspects of the business.
The case with the Securities and Exchange Commission is still on the roll, and there Zhao is charged with operating an unregistered exchange and misleading investors. Yet, he will be free for another six months, a time the former Binance boss needs to prepare his defense.
The exchange will be under tight monitoring by the U.S. government for five years.
Richard Teng (pictured above), a former regulatory official, will succeed Zhao as the new CEO. Prior to joining Binance, Teng served as CEO of the Financial Services Regulatory Authority at Abu Dhabi Global Market; chief regulatory officer of the Singapore Exchange; and director of corporate finance in the Monetary Authority of Singapore.
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