Changpeng Zhao, also known as “CZ,” founder and CEO of the Binance exchange, has resigned and pleaded guilty to anti-money laundering charges in a lawsuit brought by the US Securities and Exchange Commission (SEC).
On November 21, the founder of Binance appeared in Seattle federal court to enter a guilty plea.
Richard Teng, former global head of regional markets at Binance, will be the exchange's new CEO, Zhao said in a post on Twitter on the afternoon of November 21. Teng was previously CEO of the Financial Services Authority at the Abu Dhabi Global Market, among other executive roles.
“It was the right thing to do,” Mr. Zhao said of his resignation. “I made a mistake and I have to take responsibility.” Mr. Zhao will remain a shareholder and said he is “available as an advisor when needed.”
Binance, the world's largest cryptocurrency exchange, has also agreed to pay about $4.3 billion to resolve investigations by the U.S. Department of Justice , the agency said in a press release on Nov. 21.
As part of Binance’s guilty plea, the exchange also reached a settlement with the U.S. Treasury Department ’s Financial Crimes Enforcement Network (FinCEN), the Office of Foreign Assets Control (OFAC), and the Commodity Futures Trading Commission (CFTC).
US Attorney General Merrick Garland and US Treasury Secretary Janet Yellen announce the case against Mr. Changpeng Zhao and Binance, November 21, 2023. Photo: NY Times
According to a press release from the US Department of Justice, Binance “admitted that it engaged in anti-money laundering, unlicensed money transmission, and sanctions violations,” while Mr. Zhao pleaded guilty to failing to implement an anti-money laundering program.
“Any organization, no matter where it is located, that wants to benefit from the U.S. financial system must follow the rules that keep us all safe from terrorists, foreign adversaries, and criminals, or face consequences,” Treasury Secretary Janet Yellen said in a press release.
Binance launched in June 2017 and within 180 days became the world's largest cryptocurrency exchange. According to CoinMarketCap data, the exchange had a trading volume of more than $12.65 billion in the last 24 hours, 532% higher than the $2 billion trading volume of the second largest cryptocurrency exchange, Coinbase.
Howard Fischer, senior partner at law firm Moses & Singer and former SEC official, discusses the ripple effect Binance’s case could have on the cryptocurrency ecosystem and how U.S. regulators will monitor the exchange more closely than they currently do.
“There are some concerns about disruptions that will occur not only in the crypto world but in the global economy in general. I think in some ways this has to be seen as a bit optimistic for the crypto space because as we have seen, they are not going to shut down the company (Binance),” Fischer explained .
Minh Duc (According to TechCrunch, Yahoo!Finance)
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