Crypto firm Binance will have to pay a $4.3 billion settlement to a US Court for federal money laundering charges.
Founder and CEO Changpeng Zhao, more known as "CZ," pleaded guilty and agreed to personally pay $50 million, as well as step down from the job.
Richard Teng, Binance's global head of regional markets, was named the new CEO.
In a post on X (formerly Twitter), Zhao said he "must take responsibility" for the charges against the company, stating that it was "not easy to let go emotionally" of his position.
Today, I stepped down as CEO of Binance. Admittedly, it was not easy to let go emotionally. But I know it is the right thing to do. I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself.
— CZ 🔶 BNB (@cz_binance) November 21, 2023
Binance is no longer a baby. It is…
According to the Department of Justice, the controversial crypto entrepreneur was accused of violating the U.S. Bank Secrecy Act and causing a financial institution to break the BSA.
He is facing one to 10 years in prison, with the sentencing scheduled for next year.
Binance itself was guilty of three criminal charges: unlicensed money-transmitting business, violating the International Emergency Economic Powers Act, and a conspiracy charge.
The crypto exchange platform was alleged to allow traders from sanctioned nations, like Iran, to engage in business with Americans.
Binance, however, was cleared of user fund misappropriation and market manipulation.
Charges Against Binance
The investigations on Binance alleged that the company's "willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform."
Prosecutors accused the crypto firm of processing 1.1 million transactions worth $900 million with Iranian traders between January 2018 and May 2022. Both Al Qaeda and ISIS were cited.
DOJ's charges came five months after the U.S. Securities and Exchange Commission accused Binance and Zhao of lying about its operations.
The monthlong trial resulted in Binance's paying "one of the largest corporate penalties" the U.S. has ever acquired from a corporate defendant.
Future for Changpeng Zhao
Zhao affirmed that he will not lead another startup after Binance, instead "do some passive investing" in blockchain, AI, or biotech firms.
The Canadian national founded Binance in July 2017, bringing it to its current status as the world's largest crypto exchange.
Binance agreed to the resolution prohibiting Zhao from "any present or future involvement in operating or managing" for three years.
Zhao will remain available to the company to consult per "the framework set out in our U.S. agency resolutions."
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