Changpeng Zhao, popularly known as "CZ" and the founder and CEO of Binance, has announced his resignation while pleading guilty to multiple violations brought forth by the U.
S. Department of Justice (DOJ) and other U.S. agencies. CZ appeared in a Seattle federal court on Tuesday to enter his plea.
As part of this transition, Richard Teng, Binance's former global head of regional markets and former CEO of the Financial Services Regulatory Authority at Abu Dhabi Global Market, will take over as the new CEO, as revealed in a post by Zhao on Tuesday afternoon. In response to stepping down, Zhao acknowledged his mistakes, stating, "it is the right thing to do," and emphasized that he would take responsibility for his actions. Although stepping down from his CEO role, Zhao will remain a shareholder and be available for consultation as needed.
Binance, recognized as the world's largest cryptocurrency exchange, has agreed to pay approximately $4.3 billion to settle the DOJ's investigations, according to a press release from the agency on Tuesday.
In connection with Binance's guilty plea, agreements have been reached with the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), the Office of Foreign Assets Control (OFAC), and the Commodity Futures Trading Commission (CFTC). The crypto exchange will credit about $1.8 billion towards resolving these agreements.
The DOJ's release states that Binance has admitted to engaging in anti-money laundering, unlicensed money transmitting, and sanctions violations, marking it as the "largest corporate resolution" involving criminal charges for an executive. Zhao specifically pleaded guilty to failing to maintain an anti-money laundering program.
U.S. Attorney General Merrick Garland emphasized the broader message, stating, "The message here should be clear: using new technology to break the law does not make you a disruptor, it makes you a criminal."
The charges against Binance, Zhao, and other related parties include knowingly failing to register as a money services business, violating the Bank Secrecy Act by not implementing an anti-money laundering program, and deliberately violating U.S. economic sanctions to profit from the U.S. market without adhering to U.S. laws.
Court documents reveal that Zhao conveyed to Binance employees the philosophy of "better to ask for forgiveness than permission," prioritizing the exchange's growth over compliance with U.S. law. The crypto exchange reportedly collected about $1.35 billion in trading fees from U.S. customers, according to CFTC Chairman Rostin Behnam.