In a significant development, Changpeng Zhao, founder and former CEO of Binance, has announced his replacement amid a Department of Justice (DOJ) press conference unveiling major cryptocurrency enforcement actions against the company.
Zhao has pleaded guilty to charges including “willfully violating the Bank Secrecy Act, knowingly failing to register as a money transmitting business, and willfully violating the International Emergency Economic Powers Act,” according to Attorney General Merrick Garland. As part of the settlement, Binance is required to pay $4.3 billion in penalties and forfeitures and undergo a five-year monitorship while adhering to DOJ reporting requirements. Additionally, Binance is mandated to make a “complete exit” from the U.S. market.
Attorney General Garland emphasized that this penalty is one of the largest ever obtained from a corporate defendant in a criminal matter, underscoring the importance of compliance with U.S. laws, even in the cryptocurrency sector.
In response to the DOJ’s announcement, Zhao acknowledged his mistakes and the need to take responsibility. Richard Teng, former Head of Regional Markets for Binance, is set to assume the role of CEO. Teng brings experience from his previous positions as CEO of the Financial Services Regulatory Authority at Abu Dhabi Global Market and Director of Corporate Finance with the Monetary Authority of Singapore. Zhao expressed confidence in Teng, stating that he will ensure Binance focuses on security, transparency, compliance, and growth in the next phase.
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.
Binance is no longer a baby. It is…
— CZ 🔶 Binance (@cz_binance) November 21, 2023
The DOJ’s press release alleges that Binance failed to prevent and report transactions involving various illicit actors, including Hamas’ Al-Qassam Brigades, Al Qaeda, ISIS, money launderers, and ransomware attackers. Treasury Secretary Janet Yellen emphasized that virtual currency exchanges and fintech firms must adhere to rules if they wish to be part of the U.S. financial system and serve U.S. customers.
Changpeng Zhao, in his announcement, mentioned taking a brief break before potentially offering guidance to a small number of upcoming entrepreneurs, imparting lessons from his experiences.