“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”, Changpeng Zhao tweeted. CZ’s agreed to step down as part of a $4 billion settlement with the US Department of Justice. On the same day, CZ also appeared in a Seattle court and pleaded guilty to violating US Anti-Money Laundering requirements.
“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed – now it is paying one of the largest corporate penalties in US history,” said Attorney General Merrick B. Garland.
The US Treasury Department said in a statement that it had taken unprecedented action to hold Binance accountable for violations of US anti-money laundering laws. They alleged that Binance failed to “prevent and report suspicious transactions with terrorists.”
Binance will pay a fine of up to $4.3 billion to end the lawsuit with the US Department of Justice within the next 15 months. CZ will also have to pay a fine of $50 million and be prohibited from any involvement with Binance for 3 years after the monitor is implemented.
US officials also charged Binance Former Chief Compliance Officer, Samuel Lim, who was found to have committed violations during the investigation. Binance will have to appoint an independent unit to monitor its activities and report to the US government. The US Treasury Department will have access to the system and check the exchange’s data. Binance will not be allowed to operate in the US.
CZ said he will spend time taking a break and investing in blockchain/Web3/DeFi, AI and biotech projects. He also stressed that there were no allegations related to the misuse of customer funds or market manipulation. Thus, the exchange still maintains its commitment to protecting users.
The judge set Zhao’s sentencing for February 23, 2024; although it may be delayed. Former Binance CEO could face up to 18 months in prison. CZ will pay a $175 million release bond and agree to return to the United States 14 days before his Feb.
Although CZ stepped down, he is still Binance’s largest shareholder. Richard Teng, the previously Global Head of Regional Markets at Binance, has been appointed as the new CEO.
“It is an honour and with the deepest humility that I step into the role of Binance’s new CEO. We operate the world’s largest cryptocurrency exchange by volume. The trust placed on us by our 150m users and thousands of employees is a responsibility that I take seriously and hold dear,” he wrote.
Following this news, the crypto market was significantly affected. BNB coin has plummeted 11%, down to $234 at the time of writing. Other major cryptocurrencies such as Bitcoin, Ethereum or Solana also lost 4-7% in value.