Changpeng Zhao (CZ), the founder of Binance, announced his resignation as CEO of the world’s largest cryptocurrency exchange after pleading guilty to federal charges and agreeing to pay $4.3 billion in fines. Binance Holdings Limited (Binance) has also pleaded guilty and agreed to settle the US Justice Department’s investigation into violations, paying over $4 billion.
Legal Proceedings and Resignation
The Justice Department stated that Zhao, a Canadian national, pleaded guilty to failing to maintain an effective anti-money laundering (AML) program, violating the Bank Secrecy Act (BSA). Consequently, he has stepped down as CEO of Binance. Richard Teng, Binance’s former global head of regional markets, will assume the role of CEO.
Transition of Leadership
In his announcement, Zhao expressed confidence in Binance’s future under new leadership, stating that the exchange has matured beyond its initial stages. He will remain available to the team as a shareholder and former CEO, offering consultation within the framework established by US agency resolutions.
Compliance Failures and Penalties
Court documents revealed that Binance prioritized growth and profits over compliance with US law. The exchange failed to implement adequate controls to prevent money laundering and allowed transactions with customers in sanctioned jurisdictions. Attorney General Merrick B. Garland emphasized that Binance’s rise to become the largest cryptocurrency exchange was partly due to its criminal activities, resulting in one of the largest corporate penalties in US history.
Future Ventures of Changpeng Zhao
Zhao disclosed his future plans, indicating a shift towards passive investing and becoming a minority token/shareholder in startups related to blockchain, Web3, DeFi, AI, and biotech. He expressed contentment with his entrepreneurial journey but stated his reluctance to assume the role of CEO in a startup again.
The legal settlement and Zhao’s resignation mark a significant development for Binance, underscoring the importance of regulatory compliance in the cryptocurrency industry.
