In a November 21 press conference, the officials of the US Government have slammed Binance and its CEO, Changpeng Zhao. The officials also reached a historic settlement with the exchange to pay $4.3 billion in penalties and forfeiture, with CZ pleading guilty to one of the charges laid against him.
Quick Take:
- Binance reached a settlement with the US DOJ to pay $4.3 million in penalties.
- Changpeng Zhao pleads guilty to money laundering charges and resigns as the CEO of Binance.
- Richard Teng takes over from CZ as Binance exits the United States.
The world’s largest cryptocurrency exchange, Binance has shockingly pleaded guilty to violating the Bank Secrecy Act. The exchange admitted that it willingly did not register as a money-transmitting business and violated the Emergency Economic Powers Act.
As per Attorney General Merrick B. Garland, the documents accuse the exchange of charges like conspiracy and money laundering. After a year-long investigation by the US Government and relevant authorities, several charges have been leveled against the exchange over non-compliance.
The official filing shows that Binance refrained from complying with the legal and regulatory frameworks of the US financial system from 2017 to 2022. Nonetheless, the regulatory action against Binance is a big step for US regulators and officials.
Garland said,
“From the very beginning, Zhao and other Binance executives engaged in a deliberate and calculated effort to profit from the U.S. market without implementing the controls required by U.S. law.”
The officials added that Binance provided a pathway for transactions between US users and sanctioned entities. They particularly pointed out the transactions of around $900 million between US and Iranian users. Moreover, transactions to users in Syria and Russian-occupied Ukrainian regions were also supported.
CZ Pleads Guilty to Money Laundering, Richard Teng Takes Over
The CEO of Binance pleaded guilty to charges of violating anti-money laundering rules and regulations. He has also agreed to pay a separate $50 million fine. Zhao will be unable to be involved with the company for at least three years, as per the plea agreement.
CZ penned a heartfelt statement on X to confirm his resignation. He stated that he is taking full responsibility for his mistakes, which is best for the exchange, its community, and himself. CZ is still the major shareholder in Binance.
On the other hand, Zhao announced that Richard Teng is all set to take over as the new CEO of Binance. He was previously the Global Head of Regional Markets at Binance and joined the platform back in 2021. Tang expressed his gratitude soon after the announcement.
He tweeted,
Changpeng Zhao is, however, looking to take a break for a while before digging into other interests in the crypto and tech sector. He further said he would love to be a coach or mentor for upcoming entrepreneurs.
Binance Saga – US Authorities Tighten the Screws
As the developments continue to hit the crypto sphere, officials are making more statements on how the message should be clear now for other crypto platforms and startups. They added that Binance and CZ prioritized profits over the safety of users.
Moreover, they alleged that the exchange did not only fail to comply with regulatory requirements but it pretended to do so. The exchange now has to mark its exit from the United States. It is yet to be seen how the crypto community reacts to this news, but it will surely have an impact.
In response to the whole development on Tuesday, Binance said that the company will emerge stronger from this as it sets a foundation for the next 50 years.
