Binance CEO Zhao to step down after pleading guilty to anti-money laundering crime; agrees to pay $4.3B fine

In a swift turn of events, just a day after the U.S. Justice Department charged the world’s largest crypto exchange, Binance, with money laundering and bank fraud, the co-founder and CEO, Changpeng Zhao (CZ), has agreed to step down, according to a report from the Wall Street Journal.

In addition, CZ also pleaded guilty to violating criminal U.S. anti-money laundering (AML) requirements. As part of the resolution, the exchange is set to pay a hefty fine of $4.3 billion. CZ has reportedly agreed to pay fines amounting to $4.3 billion, covering settlements for civil allegations brought forth by regulators.

“Binance founder Changpeng Zhao agrees to step down, plead guilty. Zhao’s crypto exchange will also admit wrongdoing and agree to pay $4.3 billion in fines,” the Wall Street Journal reported.

In June, the Securities and Exchange Commission (SEC) filed a lawsuit against Binance and its founder, CZ, alleging that they were involved in an “elaborate scheme to evade U.S. federal securities laws.” Binance, in response, refuted the SEC’s accusations and said that would “vigorously defend” the integrity of its platform.

Three months earlier, the Commodity Futures Trading Commission (CFTC) said that Binance lacked a program to prevent and detect terrorist financing and money laundering over several years. CFTC later took legal action against the exchange, accusing Binance and Zhao of “willful evasion” of U.S. commodities law. The lawsuit contended that Binance operated an “illegal” exchange and maintained a “sham” compliance program. Changpeng Zhao called the charges an “incomplete recitation of the facts.”

The CFTC also added that Binance provided Americans access to derivatives, like futures or swaps, which should only be traded in the U.S. on regulated platforms. Notably, Binance never registered with U.S. regulators, rendering its leveraged products inaccessible to American traders, as per the CFTC.

According to a source familiar with the matter, U.S. government authorities are anticipated to announce a settlement with Binance Holdings on Tuesday, bringing an end to a prolonged investigation into the world’s largest crypto exchange. The settlement, expected to address charges against individuals and allegations of violating the Bank Secrecy Act and other U.S. laws, involves collaboration among various U.S. agencies, including the Justice Department, the CFTC, and the Treasury Department’s Financial Crimes Enforcement Network.

CZ founded Binance in 2017 with Yi He. The cryptocurrency exchange platform combines digital technology and finance. The company provides access to exchange digital currency pairs on the market while maintaining security, and liquidity, enabling a safe and efficient deal with anyone, anytime and anywhere.

Before founding Binance, CEO Changpeng Zhao previously founded Fusion Systems in 2005 in Shanghai; the company that built high-frequency trading systems for brokers. In 2013 he joined Blockchain.info as the third member of the cryptocurrency wallet’s team. He also worked at OKCoin as CTO for less than a year, a platform for spot trading between fiat and digital assets.

Binance founder Changpeng Zhao