Binance CEO Changpeng Zhao Resigns Amid Money Laundering Guilt

Changpeng Zhao, the CEO of Binance, has stepped down after admitting guilt to money laundering charges. In a post on X, he stated, “I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself.” The U.S. Justice Department has mandated Binance, the world’s largest cryptocurrency exchange, to pay $4.3 billion (£3.4 billion) in penalties and forfeitures. The charges allege that Binance facilitated transactions, enabling users to circumvent global sanctions.

According to the Justice Department, Binance permitted nearly $900 million in transactions between U.S. and Iranian users and facilitated transactions between U.S. users and those in Syria, Crimea, Donetsk, and Luhansk. The exchange, registered in the Cayman Islands, is renowned as the foremost platform for trading cryptocurrencies.

The Justice Department further accused Binance of providing an easy means for criminals and terrorists to transfer money. It highlighted direct transfers of around $106 million in bitcoin from the Russian darknet marketplace Hydra to Binance.com wallets between August 2017 and April 2022. As part of the penalty, Binance is now required to report suspicious activity to federal authorities, enhancing criminal investigations into cybercrime and terrorism financing through cryptocurrency exchanges.

Richard Teng, the head of regional markets at Binance, has been appointed as the new CEO. Changpeng Zhao, a prominent figure in the crypto space, acknowledged the emotional difficulty of stepping down. This development follows U.S. regulators’ attempts in March to ban Binance, accusing the firm of operating illegally in the country. The Commodity Futures Trading Commission (CFTC) alleged that Binance violated various U.S. financial laws, including anti-money laundering regulations.

Binance had defended its practices, emphasising substantial investments to prevent U.S. users’ activity on the platform. In June, the “Securities and Exchange Commission (SEC)” filed another lawsuit, accusing Binance and Zhao of disregarding investor protection rules to continue operating in the U.S. Despite these challenges, Binance vowed to vigorously defend itself. The U.S. authorities have intensified efforts to address fraud and other concerns within the crypto industry, particularly following the collapse of Binance rival FTX last year. In a recent development, Sam Bankman-Fried, the founder of FTX, was found guilty of fraud earlier this month.