Binance CEO Pleads Guilty to Violating U.S. AML Laws, Steps Down in Landmark Settlement
Changpeng Zhao (CZ) agrees to $50m fine, Binance faces $4.3B penalty for breaching anti-money laundering rules.
Binance founder and Chief Operating Officer Changpeng “CZ” Zhao has resigned as CEO and admitted to violating U.S. anti-money laundering laws. This move is part of a widely anticipated settlement with the U.S. Department of Justice (DOJ), which may enable the company to continue its operations.
In a live video announcement on Tuesday, the DOJ confirmed that Zhao will plead guilty to neglecting anti-money laundering regulations. This marks one of the most significant enforcement actions ever concluded in a crypto-related case.
Zhao will personally pay a $50 million fine, while Binance has agreed to a $4.3 billion penalty for its legal infractions. These include operating an unlicensed money-transmitting business and failing to maintain an effective anti-money laundering program. The company will pay $1.81 billion within 15 months and an additional $2.51 billion as part of its DOJ agreement.
In a post on Tuesday, Zhao confirmed his resignation, acknowledging his mistakes and accepting responsibility. “I can’t see myself being a CEO driving a startup again. I am content being a one-shot (lucky) entrepreneur,” he stated. Richard Teng, Binance’s former Global Head of Regional Markets, will succeed Zhao as CEO. Teng’s focus will be on collaborating with regulators, promoting Web3 adoption, and assuring users of Binance’s safety and security.
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 🔶 Binance (@cz_binance) November 21, 2023
Binance is no longer a baby. It is…
Since its establishment in July 2017, Zhao has led Binance to become the world’s largest cryptocurrency exchange by trading volume. Following the announcement, the price of Binance’s native token BNB dropped 5.2% from $253 to $240.
The DOJ initiated its investigation into Binance in 2018, with the IRS joining in 2021. Charges against Binance were first filed on November 14 but were only unsealed on Tuesday. Binance still faces extensive dual lawsuits from U.S. financial regulators, alleging mishandling of customer assets and failure to register as a regulated commodities and securities exchange. The Securities and Exchange Commission (SEC) also sued the U.S.-based crypto exchange Kraken on Monday for similar misconduct.