Binance CEO Changpeng Zhao Reportedly Quits and Pleads Guilty to Breaking US Law
Changpeng Zhao, also known as CZ, will reportedly step down and plead guilty to violating money laundering requirements as part of a DOJ settlement. The company will also pay $4.3bn in fines.
Person speaking into a microphone in front of a blue screen
Changpeng ZhaoPhotograph: Benjamin Girette/Bloomberg/Getty Images
Binance chief executive Changpeng Zhao is stepping down as part of a settlement with the US Department of Justice (DOJ), according to multiple reports. The Wall Street Journal reports that Zhao will plead guilty to violating anti-money-laundering rules, and the crypto exchange will pay more than $4 billion in fines.
A DOJ indictment, filed in a US district court in Washington State, alleges that Zhao violated the Bank Secrecy Act by “wilfully” letting Binance operate without an effective anti-money laundering program.
Under Zhao’s management, the DOJ alleges, Binance “caused, according to its own data, at least $890 million in transactions between US users and users Binance identified as Iranians.” The US has imposed strict financial sanctions on Iran. Binance also allowed transactions between US users and counterparts in other sanctioned jurisdictions, including Cuba, Syria and illegally occupied regions of Ukraine, the indictment says.
Zhao also “prioritized Binance’s growth and profits over compliance with US law,” the indictment alleges. He acknowledged the company operated in what he described “grey zone,” but instructed staff that it was “better to ask for forgiveness than permission,” the indictment states.
A source with knowledge of the company’s succession plan tells WIRED that Richard Teng, currently head of regional markets at Binance, is likely to take over. Teng was the CEO of Abu Dhabi Global Market, a financial regulator in the UAE. Teng is said to be a popular choice among Binance staff.
Further details are expected to be announced Tuesday afternoon. Forbes also reported details of the settlement. The US Department of Justice (DOJ) has been approached for comment.
Zhao reportedly resides in the United Arab Emirates. Although the country has signed a mutual legal assistance treaty with the US, under which the two countries agreed to exchange information relating to investigations into criminality, there is no formal extradition treaty in place, and it would have been “very challenging” to bring him to court in the US, according to John Stark, a former SEC attorney, speaking before the news of the settlement broke.
In the last year, Zhao had taken to responding to negative headlines on X, formerly Twitter, by posting “4”—a symbol he adopted to dismiss allegations made against the company as baseless FUD (shorthand for fear, uncertainty and doubt). But the DOJ investigation into Binance was an open secret in crypto circles, and Binance insiders say that staff have been anxiously waiting for charges to drop, amid a “general sense of doom.”
Binance is by far the largest cryptocurrency exchange in the world by transaction volume, with around 40 percent of global market share, and is a major part of the infrastructure underpinning the crypto business. The DOJ settlement will reportedly allow Binance to continue to operate in the US, albeit under tighter supervision.
The company also faces two civil lawsuits in the US, brought by the Commodities and Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC), alleging, among other things, commingling of customer assets, anti-money-laundering violations, and artificially inflating trading volumes.
This is a breaking story. Please check back for updates
magic_lobster_party@kbin.social
on 21 Nov 2023 20:55
nextcollapse
$4 billion in fines? Let’s see how liquid Binance really is.
I see it now, thanks. Guess I skimmed the last half earlier.
Misanthrope@lemmy.ml
on 22 Nov 2023 13:06
nextcollapse
CZ would freguently post “4” in response to criticism or allegations. It was his way of saying all of the bad news about him was FUD.
Hopefully he lands in jail, but I don’t think he’ll be coming to the US anytime soon.
Voroxpete@sh.itjust.works
on 22 Nov 2023 20:08
collapse
At some point CZ outlined a bunch of “rules” for winning bigly in crypto (read: “getting suckered by his scam”) and rule 4 was “Ignore FUD.” Ever since, when bad news happened he would just reply with “4” as a shorthand.
dingleberry@discuss.tchncs.de
on 22 Nov 2023 08:39
nextcollapse
threaded - newest
Unbelievable. I thought he alone would get away, since he seemed to enjoy the protection of higher powers. I wonder if the UAE will extradite him ?
paywall I sleep
Here ya go, get the extension “no script”
Binance CEO Changpeng Zhao Reportedly Quits and Pleads Guilty to Breaking US Law Changpeng Zhao, also known as CZ, will reportedly step down and plead guilty to violating money laundering requirements as part of a DOJ settlement. The company will also pay $4.3bn in fines. Person speaking into a microphone in front of a blue screen Changpeng ZhaoPhotograph: Benjamin Girette/Bloomberg/Getty Images
Binance chief executive Changpeng Zhao is stepping down as part of a settlement with the US Department of Justice (DOJ), according to multiple reports. The Wall Street Journal reports that Zhao will plead guilty to violating anti-money-laundering rules, and the crypto exchange will pay more than $4 billion in fines.
A DOJ indictment, filed in a US district court in Washington State, alleges that Zhao violated the Bank Secrecy Act by “wilfully” letting Binance operate without an effective anti-money laundering program.
Under Zhao’s management, the DOJ alleges, Binance “caused, according to its own data, at least $890 million in transactions between US users and users Binance identified as Iranians.” The US has imposed strict financial sanctions on Iran. Binance also allowed transactions between US users and counterparts in other sanctioned jurisdictions, including Cuba, Syria and illegally occupied regions of Ukraine, the indictment says.
Zhao also “prioritized Binance’s growth and profits over compliance with US law,” the indictment alleges. He acknowledged the company operated in what he described “grey zone,” but instructed staff that it was “better to ask for forgiveness than permission,” the indictment states.
A source with knowledge of the company’s succession plan tells WIRED that Richard Teng, currently head of regional markets at Binance, is likely to take over. Teng was the CEO of Abu Dhabi Global Market, a financial regulator in the UAE. Teng is said to be a popular choice among Binance staff.
Further details are expected to be announced Tuesday afternoon. Forbes also reported details of the settlement. The US Department of Justice (DOJ) has been approached for comment.
Zhao reportedly resides in the United Arab Emirates. Although the country has signed a mutual legal assistance treaty with the US, under which the two countries agreed to exchange information relating to investigations into criminality, there is no formal extradition treaty in place, and it would have been “very challenging” to bring him to court in the US, according to John Stark, a former SEC attorney, speaking before the news of the settlement broke.
In the last year, Zhao had taken to responding to negative headlines on X, formerly Twitter, by posting “4”—a symbol he adopted to dismiss allegations made against the company as baseless FUD (shorthand for fear, uncertainty and doubt). But the DOJ investigation into Binance was an open secret in crypto circles, and Binance insiders say that staff have been anxiously waiting for charges to drop, amid a “general sense of doom.”
Binance is by far the largest cryptocurrency exchange in the world by transaction volume, with around 40 percent of global market share, and is a major part of the infrastructure underpinning the crypto business. The DOJ settlement will reportedly allow Binance to continue to operate in the US, albeit under tighter supervision.
The company also faces two civil lawsuits in the US, brought by the Commodities and Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC), alleging, among other things, commingling of customer assets, anti-money-laundering violations, and artificially inflating trading volumes.
This is a breaking story. Please check back for updates
$4 billion in fines? Let’s see how liquid Binance really is.
“friends with the UAE” level liquid, apparently
I hate you might be right.
Or use reader mode on Firefox or any of a bunch of browserd
Sometimes doesn’t work after the JS code is already run
lol this is good for bitcoin or something
He gonna give a bad rep to bitcoin
Bitcoin already had a bad rep since Mt. Gox.
.
Since day one and people could see what it really was.
Please, let his response be:
4
I don't get it
It’s in the article. The guy uses the number 4 as a symbol of his innocence or something along those lines.
I see it now, thanks. Guess I skimmed the last half earlier.
CZ would freguently post “4” in response to criticism or allegations. It was his way of saying all of the bad news about him was FUD.
Hopefully he lands in jail, but I don’t think he’ll be coming to the US anytime soon.
At some point CZ outlined a bunch of “rules” for winning bigly in crypto (read: “getting suckered by his scam”) and rule 4 was “Ignore FUD.” Ever since, when bad news happened he would just reply with “4” as a shorthand.
So no more shitposting from this guy?
Does this mean we get to increase the block size and make bitcoin viable again?