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Binance founder and CEO Changpeng Zhao announces he’s stepping down as the CEO of the cryptocurrency exchange center. The news comes after Binance was accused of money laundering and breaking sanctions against specific countries.
The company’s former global head of regional markets, Richard Teng, will be the new CEO. Zhao wrote on his X account that “it was not easy to let go emotionally. But I know it is the right thing to do.” He further added he takes responsibility for the mistakes and stepping down is the best decision for all.
Following the federal money laundering charges, Binance reached a plea deal with the US Justice Department that cost the company $2.5 billion. The fines also make up for $1.8 billion. Besides paying $50 million in personal fines, the ruling bars Zhao from any association with Binance for three years. Zhao also pleaded guilty to charges that he and his company violated the Bank Secrecy Act.
Binance’s CEO is leaving the company following the money laundering charges
It was alleged that Zhao and Binance had not implemented a robust anti-money laundering program to prevent suspicious activities. They broke economic sanctions “in a deliberate and calculated effort to profit from the U.S. market without implementing controls required by U.S. law,” the Justice Department claims.
According to court records, between 2018 and 2022, Binance enabled about $900 million in financial transactions that violated Iran’s sanctions due to a lack of anti-money laundering procedures.
Earlier this year, the Commodity Futures Trading Commission (CFTC), which regulates the U.S. derivatives markets, accused Zhao, Binance, and the company’s former compliance chief, Samuel Lim, of violating its rules and the Commodity Exchange Act. The Binance new settlement with the U.S. agencies resolves most allegations against the company. However, Samuel Lim should still face his charges.
Treasury Secretary Janet Yellen said, “Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform.”
While Binance could continue with its operations, it loses $4.3 billion in total and must accept stricter supervision by lawmakers. The company must also ensure it meets national anti-money laundering regulations and appoint an independent compliance monitor.