Key Insights
- Binance CEO Changpeng Zhao stepped down as part of a $4.3B settlement with DOJ
- Zhao intends to plead guilty to criminal charges related to anti-money laundering violations
- Settlement ends DOJ probe but SEC lawsuit still pending as Binance faces further legal issues
NEW YORK — Changpeng Zhao, the embattled founder and CEO of leading cryptocurrency exchange Binance, stepped down from his executive role and pleaded guilty to criminal charges as part of a landmark $4.3 billion settlement with U.S. authorities, according to multiple reports.
Sources tell The Wall Street Journal that Zhao, better known in crypto circles as “CZ”, will appear in federal court in Seattle on November 21st to enter a guilty plea related to violating anti-money laundering laws. While the plea deal would reportedly allow CZ to maintain ownership of Binance, he will no longer be permitted to serve in an executive leadership capacity.
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…
— CZ 🔶 Binance (@cz_binance) November 21, 2023
The pending settlement ends a long-running investigation of Binance by the U.S. Department of Justice and other agencies concerning allegations of fraud, money laundering and sanctions violations. The staggering $4.3 billion penalty includes funds allotted to resolve parallel civil cases still pending with the Commodity Futures Trading Commission and Treasury Department.
However, Binance and CZ still face a separate lawsuit filed by the Securities and Exchange Commission this summer, which the DOJ deal does not incorporate. That suggests further legal woes may persist even if the DOJ probe gets resolved.
Reaction among crypto industry players was swift as rumors swirled of the iconic executives’ impending exit under a cloud of criminal charges. But while CZ’s days leading the exchange appear numbered, some expect his plea bargain to enable Binance to move forward with operations intact, while putting the focus on regulatory compliance going forward.