Media Reports that Binance Founder Changpeng Zhao Pleads Guilty and Steps Down from Company
Posted on 11/21/2023
Changpeng Zhao (CZ) is the Founder and Chief Executive Officer of Binance Holdings Ltd. Binance is the largest global cryptocurrency exchange.
Various media reports (including Bloomberg, Forbes, and WSJ), CZ was in Seattle federal court Tuesday and entered his plea. CZ plans to step down and plead guilty to violating criminal U.S. anti-money-laundering requirements, in a deal that may preserve the company’s ability to continue operating. Binance was founded in 2017 by CZ, a Canadian national.
Binance argued that it isn’t subject to U.S. laws because it doesn’t have a physical headquarters in the United States.
UPDATE
Binance is charged with three counts, including money laundering violations, conspiracy to conduct an unlicensed money transmitting business, and sanctions violations. Zhao plead guilty to a criminal charge and Binance agree to pay fines totaling US$ 4 billion, which includes amounts to settle civil allegations made by regulators. CZ agreed to plead guilty to anti-money laundering charges and pay a $50 million fine during a hearing in Seattle federal court. He is barred from any future involvement in Binance’s business. CZ will maintain his majority ownership of firm.
The U.S. Department of Justice was seeking billions to end its years-long investigation of Binance. Binance could be too big too fail. A deferred prosecution agreement is typically used in cases where the DOJ finds that the collateral consequences of a criminal prosecution of a corporation are not worth it. The plea arrangement with the government resolves a multi-year investigation into the world’s largest crypto exchange. The charges follow civil suits brought earlier this year by both the Securities and Exchange Commission and the Commodity Futures Trading Commission. SEC Chair Gary Gensler added, “Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law.”
Kraken
On another note, U.S. SEC accused San Francisco-based Kraken of securities law violations. Kraken has joined listed company Coinbase and Binance as targets of Securities and Exchange Commission (SEC) accusations that the companies are operating without properly registering as securities businesses in the U.S.
“Similarly, Kraken has held at times more than $5 billion worth of its customers’ cash, and it also commingles some of its customers’ cash with some of its own,” the SEC lawsuit said. “In fact, Kraken has at times paid operational expenses directly from bank accounts that hold customer cash.”
CZ Tweet
CZ tweeted, “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 time for me to let it walk and run. I know Binance will continue to grow and excel with the deep bench it has.
I’m pleased to announce that @_RichardTeng, our now former Global Head of Regional Markets, has been named the new CEO of Binance today.
Richard is a highly qualified leader and, with over three decades of financial services and regulatory experience, he will navigate the company through its next period of growth. He will ensure Binance delivers on our next phase of security, transparency, compliance, and growth.
Prior to joining Binance, Richard was 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 in the Monetary Authority of Singapore.
With Richard and the entire team, I’m confident that the best days for @Binance and the crypto industry lay ahead.
As a shareholder and former CEO with historical knowledge of our company, I will remain available to the team to consult as needed, consistent with the framework set out in our U.S. agency resolutions.
What’s next for me?
I will take a break first. I have not had a single day of real (phone off) break for the last 6 and half years.
After that, my current thinking is I will probably do some passive investing, being a minority token/shareholder in startups in areas of blockchain/Web3/DeFi, AI and biotech. I am happy that I will finally have more time to spend looking at DeFi.
I can’t see myself being a CEO driving a startup again. I am content being an one-shot (lucky) entrepreneur. Should there be listeners, I may be open to being a coach/mentor to a small number of upcoming entrepreneurs, privately. If for nothing else, I can at least tell them what not to do.
On that note, I am proud to point out that in our resolutions with the U.S. agencies they:
– do not allege that Binance misappropriated any user funds, and
– do not allege that Binance engaged in any market manipulation.
Funds are SAFU!
With that, I look forward to seeing the new leadership take the reins. Please join me in congratulating Richard on his well-deserved promotion.
Onwards!
CZ”
Twitter stamp: 12:36 PM · Nov 21, 2023 · 5.8M Views
Link: https://twitter.com/cz_binance/status/1727063503125766367
