Binance CEO Changpeng Zhao Announces Decision To Resign and Admits Guilt
Changpeng Zhao, founder of Binance, the world's largest Bitcoin and cryptocurrency exchange, has agreed to plead guilty to charges of money laundering, as revealed in recent court documents. Binance will also plead guilty and is set to pay fines and restitution totaling $4.3 billion.
Zhao will pay a $50 million fine and resign as CEO of the company. The agreement includes the appointment of a monitor for Binance, and Zhao is prohibited from any involvement in the company's operations for three years following the monitor's appointment.
The documents, dated November 20th, indicate that charges were filed against both Binance and Zhao on November 14th.
The charges include evasion of laws like the Bank Secrecy Act, which mandates financial institutions to verify customer identities and avoid transactions with criminals or those under economic sanctions.
Binance reportedly allowed customers from sanctioned countries like Iran, Cuba, and Syria access to its platform.
Prosecutors accused Binance of operating an unlicensed money transmitting business, breaching bank secrecy and federal sanctions laws. Binance conducted transactions with U.S.-based businesses against regulations, with Zhao personally involved in obscuring these dealings.
The filings describe instances where Binance reinstated users previously barred for suspicious activities.
This development is significant for the overall industry, given Binance's vast influence and Zhao's stature. Binance has been a dominant force, processing a substantial portion of all Bitcoin and cryptocurrency trades globally.
Zhao, a prominent figure in the digital assets space with millions of followers on social media, previously positioned himself as a compliant industry leader.
Earlier, Sam Bankman-Fried was convicted of fraud related to the collapse of his FTX cryptocurrency exchange. The broader crackdown includes charges against several executives and lawsuits against major companies like Coinbase and Kraken by U.S. authorities.
Binance has faced numerous regulatory actions this year, affecting its business operations significantly. The SEC's recent lawsuit against Binance and Zhao accused them of mismanaging customer funds and misleading regulators.
These developments highlight the increasing regulatory scrutiny and challenges faced by the digital asset space.