Binance founder Changpeng “CZ” Zhao has resigned as CEO in the wake of a $4 billion settlement between the cryptocurrency exchange and various United States regulatory agencies. The settlement concludes extensive investigations by the Department of Justice and others into anti-money laundering and sanctions violations. In a statement, Zhao acknowledged making mistakes and expressed responsibility for the benefit of the community, Binance, and himself. The company conceded it failed to implement appropriate compliance controls during its initial launch. Despite stepping down as CEO, Zhao will remain the majority shareholder and serve as a resource for consultation on historical aspects of the business. Binance executive Richard Teng is set to succeed Zhao as CEO.
As part of the settlement, Zhao pleaded guilty to anti-money laundering and sanctions violations in federal court in Seattle. Binance also settled charges with the Department of Justice, Commodities Futures Trading Commission, Financial Crimes Enforcement Network (FinCEN), and the Office of Foreign Assets Control (OFAC). The settlement includes a $3.4 billion penalty to FinCEN and $968 million to OFAC, along with compliance requirements and a five-year monitorship. The Treasury Department accused Binance of failing to prevent and report suspicious transactions involving terrorists, including Al Qaeda and ISIS.
Brian Armstrong, CEO of Binance’s US competitor Coinbase, viewed the settlement as an opportunity for the cryptocurrency industry to turn a new page. He hoped it would catalyze regulatory clarity, recognizing his own company’s regulatory challenges with the SEC. The SEC previously charged Binance and Zhao in June for operating an unregistered exchange and misleading investors. The case is ongoing, and the SEC has yet to comment on the recent developments.
