- Binance gets a new CEO – Richard Teng with CZ vacating the post active immediately
- Binance will have to completely exit from US markets in a deal with FinCEN, but Binance.US unaffected
The United States Department of Justice has finally made an official statement on the charges against the largest crypto exchange – Binance and its former CEO – Changpeng Zhao. The US government reached a deal with both parties earlier today, with CZ pleading guilty to charges first, followed by the crypto firm.
Moreover, the deal has also seen one of the heaviest penalties imposed on a crypto entity, with Binance having to pay over $4 billion in total. Moreover, even CZ was required to pay a fine of $50 million. This will be directed to the Commodity Futures Trading Commission (CFTC) to absolve its charges against the exchange and its founder.
In its press conference held today, after the court hearing, the government flagged the sanctions violations and the crypto exchange’s services provided to US customers despite claiming to have exited the market. Janet Yellen – US Treasury secretary – also claimed that the exchange knowingly withheld information from the regulators, despite flagging suspicious transactions.
Moreover, the officials revealed that the exchange also knew the platform being used by terrorist organisations such as Hamas, Al Qaeda, and ISIS. A press release by Secretary Yellen said that over 100,000 transactions belonged to illicit actors but Binance never filed a suspicious activity report. It further read that Binance “also allowed over 1.5 million virtual currency trades that violated U.S. sanctions.”
During the press conference, it was also revealed that Binance will be completely exiting the US market as part of the deal. However, this does not apply to its American affiliate – Bianance.US – as the firm is a regulated entity. Secretary Yellen said,
“The monitor will be able to access Binance’s systems, transactions, and accounts and will review and report on all actions included in the settlement agreements. Failure to live up to these obligations could expose Binance to substantial additional penalties.”
Binance’s CZ bids goodbye
Meanwhile, Changpeng Zhao, popularly known as CZ, bid his goodbye as the Chief Executive Officer of Binance on X today. The former executive claimed that this move was the “right thing to do”. He said,
“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.”
Notably, while the plea deal does mandate the resignation of CZ from the CEO post, the prohibition lasts for only three years. This could mean that Zhao could return to the post in time.
With CZ departing as the CEO, the role will now be taken over by Richard Teng – the former Global Head of Regional Markets. Notably, Teng served as the CEO of the Financial Services Regulatory Authority at Abu Dhabi Global Market (ADGM), before joining Binance.
It is an honour and with the deepest humility that I step into the role of Binance’s new CEO.
We operate the world’s largest cryptocurrency exchange by volume. The trust placed on us by our 150m users and thousands of employees is a responsibility that I take seriously and hold…
— Richard Teng (@_RichardTeng) November 21, 2023
Speaking about what was next, CZ stated that he would not act as a CEO for another start-up again, adding that he would be taking a break first. He also stated,
“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!”
The story is still developing…