Binance CEO CZ Steps Down As Part Of $4 Billion Settlement With US

Binance CEO CZ resigns
Founder and CEO of Binance Changpeng Zhao, commonly known as “CZ”, attends the “CZ 

As part of a significant $4 billion settlement between US agencies and the cryptocurrency exchange he established, Changpeng “CZ” Zhao resigned as CEO of Binance.

The Department of Justice and other authorities had been looking into allegations of anti-money laundering and sanctions violations for years. Zhao and other regulatory agencies made their announcement on Tuesday.

In an email to X, the website that was once known as Twitter, Zhao stated, I made mistakes, and I must accept responsibility. This is what’s best for Binance, our community, and me personally.

The exchange declared in a news release that it will accept accountability for failing to implement suitable compliance measures. When Binance first debuted, its compliance procedures were insufficient for the rapidly growing company that it should have been.

Forbes was the first to disclose Zhao’s resignation as CEO, although the crypto exchange will not totally separate from him. According to the corporation, the founder will continue to have a majority stake in the business and be a resource for “consultation on historical areas of the business.” It also confirmed prior reports from Forbes that Binance executive Richard Teng will take over as CEO in place of Zhao.

Zhao entered a guilty plea to the Department of Justice’s charges of anti-money laundering and sanctions violations on Tuesday afternoon in federal court in Seattle as part of the settlement.

Binance also reached a settlement with the Department of Justice (DOJ), the Commodities Futures Trading Commission, the Office of Foreign Assets Control (OFAC), and the Department of Treasury (FinCEN). As a result, the Treasury Department will have access to the exchange’s books and records for a period of five years.

During a press conference on Tuesday, US Attorney General Merrick Garland stated, that Binance became the largest cryptocurrency exchange in the world because of the crimes committed. Binance has now settled one of the biggest corporate fines in American history.

In a statement, the Treasury Department announced that it has taken “unprecedented action” to hold Binance responsible for breaking American anti-money laundering regulations. Citing both Al Qaeda and ISIS, it said that Binance had neglected to stop and disclose “suspicious transactions with terrorists. A $3.4 billion fine to FinCEN and $968 million to OFAC are included in the settlement, along with five years of compliance obligations and monitoring.

The exchange ignored its legal responsibilities in order to maximize profits. Treasury Secretary Janet Yellen said at a press conference that its deliberate failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform.

At the time of publication, the CFTC had not responded to requests for comment.

In June, the SEC had previously accused Binance and Zhao of running an unlicensed exchange and deceiving investors by inflating the trading volume on Binance’s U.S. platform through the use of a fund domiciled in Switzerland called Sigma Chain, which was also owned by CZ. SEC chair Gary Gensler stated in June, We allege through thirteen charges that Zhao and the company entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law. The legal matter is still pending. The SEC chose not to respond.

In a post on X, Brian Armstrong, the CEO and co-founder of Coinbase, Binance’s US rival, praised the decision as “an opportunity to start a new chapter for this industry.”

Armstrong expressed his hope that the action against Binance would function as a catalyst for regulatory clarity. Armstrong’s company has been subject to regulatory investigation from the SEC.

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