Changpeng Zhao, the chief of Binance, resigned and pleaded guilty to breaking U.S. anti-money laundering laws as part of a significant settlement with the U.S. Department of Justice (DOJ). This settlement, valued at $4.3 billion, resolves a long-standing investigation into the world’s largest crypto exchange. Zhao’s personal contribution to the settlement is $50 million, making it one of the largest corporate penalties in U.S. history​​.

The investigation uncovered that Binance had violated U.S. anti-money laundering and sanctions laws, failing to report over 100,000 suspicious transactions with organizations described as terrorist groups by the U.S., such as Hamas, al Qaeda, and the Islamic State of Iraq and Syria. Additionally, Binance was implicated in not reporting transactions related to websites selling child sexual abuse materials and was identified as one of the largest recipients of ransomware proceeds.

As part of the settlement agreement, Binance is required to pay $1.81 billion within 15 months and a further $2.51 billion in forfeiture. The Justice Department, alongside the Commodity Futures Trading Commission (CFTC) and the Treasury Department, is seeking an 18-month prison sentence for Zhao, the maximum suggested under federal guidelines​​​​.

Following the settlement, Zhao stepped down as CEO, stating his recognition of the mistakes made and the need to take responsibility.

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.

Binance is no longer a baby. It is…

— CZ 🔶 BNB (@cz_binance) November 21, 2023

Richard Teng, a longtime Binance executive, has been announced as his successor. Teng’s focus will be on reassuring users about the financial strength, security, and safety of the company. This change in leadership is seen as a move to give Binance a chance to continue its operations while removing Zhao, who had become a significant figurehead in the company​​​​​​​​.

Under Teng’s leadership, Binance aims to transform into a more conventional financial institution, aligning with the increasingly rigorous regulatory environment for digital currency exchanges. With Teng’s background in financial regulation, Binance plans to closely work with financial regulators and governments to ensure compliance with applicable rules and guidelines. This shift is part of Binance’s efforts to create a smoother and more secure experience for its users and to solidify its reputation within the global financial community.

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