Crypto King Changpeng Zhao, Binance Boss, Dethroned for Alleged US Misdeeds

"Leading Cryptocurrency Figure Changpeng Zhao Resigns Amidst Guilty Plea and Potential Legal Consequences"

LONDON (Reuters) – Changpeng Zhao, the CEO of Binance, has stepped down and pleaded guilty to violating U.S. anti-money laundering laws as part of a $4.3 billion settlement. This settlement resolves a long-running investigation into the world’s largest cryptocurrency exchange. The deal with the Justice Department, along with other U.S. agencies, settles criminal charges related to operating an unlicensed money transmitter business, conspiracy, and breaching sanctions regulations. Zhao’s future is now uncertain, and he will personally pay $50 million and is prohibited from any involvement with Binance. Sentencing guidelines suggest a prison term of 10 to 18 months, with prosecutors seeking an 18-month sentence.

In a tweet, Zhao acknowledged his resignation as CEO, stating, “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.” However, Zhao and his lawyers have not provided any further comments on the matter.

Zhao founded Binance in Shanghai in 2017 with ambitious goals of dominating the entire market. Despite facing numerous challenges, he remained steadfast in his belief and continued to build up the cryptocurrency exchange. In a review of the previous year, Zhao highlighted Binance’s progress in complying with global regulations and emphasized the development of a strong security and compliance team. However, these aspirations have been shattered by the guilty plea and settlement.

U.S. Attorney General Merrick Garland criticized Binance for failing to comply with U.S. law, stating that it made it easy for criminals to move stolen funds and illicit proceeds on its exchanges. Garland also accused Binance of pretending to comply with federal law while actually disregarding it.

Zhao’s journey to success began in China, where he was born, before moving to Canada at the age of 12. He later worked in Tokyo and New York before settling in Shanghai, where he embraced cryptocurrency and founded Binance. The company rapidly expanded and became the world’s largest cryptocurrency exchange within six months. Although its market share has slightly declined this year, Binance still accounts for approximately half of global cryptocurrency trading volumes.

Throughout Binance’s growth, Zhao maintained a tight grip on the company, demonstrating a commitment to secrecy and a focus on market domination. He personally oversaw minute operational details while also engaging with world leaders and city mayors on social media. Zhao appointed a close circle of associates, many of whom had ties to China, to top positions within the company. Despite hiring individuals from traditional financial and regulatory backgrounds, Zhao’s control over Binance remained unwavering. The company, which describes itself as an “ecosystem,” has established over 70 entities, most of which are personally controlled by Zhao.

It remains unclear whether Zhao will relinquish control of these entities. In the meantime, Richard Teng, a senior Binance executive who joined in 2021, has been appointed as the new CEO. Zhao expressed his confidence in Teng, stating that he will ensure Binance delivers on its next phase of security, transparency, compliance, and growth.

Martin Reid

Martin Reid

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