30 Under 30 2024

CEO of crypto exchange Binance resigns amidst their settlement with US authorities

Binance has agreed to pay $4.3 billion after being accused by US authorities of violating sanctions laws and failing to maintain proper AML regulations

Shashank Bhardwaj
Published: Nov 23, 2023 05:54:51 PM IST

CEO of crypto exchange Binance resigns amidst their settlement with US authoritiesImage: Shutterstock

Amidst an ongoing settlement process between the US Department of Justice (DoJ) and Binance, CEO Changpeng Zhao (CZ) has resigned.

CZ’s resignation comes as a shock to many, given his instrumental role in establishing Binance as the world’s largest crypto exchange. In a statement on social media platform X, he acknowledged mistakes, stating, “I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself.”

As part of the settlement, CZ appeared in front of the federal court in Seattle, and pleaded guilty to violating the Bank Secrecy Act. He agreed to pay a personal fine of $50 million. Binance agreed to pay a settlement of $4.3 billion after failing to adhere to anti-money laundering (AML) regulations and violating sanctions law.

Binance also settled charges with the DOJ and Commodities Futures Trading Commission (CFTC), the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC). This gave the Treasury Department access to Binance’s books and records under the terms of a five-year monitorship.

Treasury Secretary Janet Yellen pointed out that Binance’s settlement was the largest in Treasury history.

In accordance with terms of the settlement, Binance must appoint an independent compliance monitor for three years to oversee its AML and KYC compliance efforts. It is also required to report its compliance progress to the DoJ regularly. Additionally, CZ is barred from involvement in Binance's operations, with the ban expiring three years after the monitor's appointment.

Amidst this upheaval, Binance has named Richard Teng, its Global Head of Regional Markets, the new CEO. Teng is highly qualified with over three decades of experience in the financial services and regulatory space. Before joining Binance, he was the CEO of the Financial Services Regulatory Authority at Abu Dhabi Global Market (ADGM), Chief Regulatory Officer of the Singapore Exchange (SGX), and Director of Corporate Finance at the Monetary Authority of Singapore (MAS).

Following the Binance CEO’s resignation news, Bitcoin dipped slightly on Nov 21. However, the market’s reaction was short-lived. Within 24 hours, Bitcoin regained most of its losses, trading back above $36,000.

The settlement underscores the US government’s intensified efforts to crack down on money laundering and sanctions evasion in the crypto space. Meanwhile, CZ’s departure signifies a pivotal transition for Binance.

The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash

Post Your Comment
Required
Required, will not be published
All comments are moderated
From Delhi to Washington: Sanjay Govil's journey to Major League Cricket
Belgium plans to develop a European blockchain infrastructure during its EU presidency