In recent court filings on November 21 in Seattle, Changpeng Zhao, the founder and CEO of the globally renowned cryptocurrency exchange Binance, has admitted guilt in violating money laundering laws and agreed to step down from his CEO position.
This development is part of a significant settlement by the Department of Justice, requiring Binance to pay over $4 billion in fines, with Zhao personally contributing $50 million.
In a post on X (formerly Twitter), Zhao announced, “Today, I stepped down as CEO of Binance,” acknowledging the emotional challenge of the decision but emphasizing its necessity due to his admitted mistakes.
Richard Teng, Binance’s former global head of regional markets, will assume Zhao’s role. Zhao described Teng as a “highly qualified leader with over three decades of financial services and regulatory experience.”
To allay concerns about user funds, Zhao also clarified in his post that the resolution with US agencies does not accuse Binance of misappropriating user funds or engaging in market manipulation.
Despite these reassurances, Binance (BNB)’s price witnessed a 9.4% decrease in the past 24 hours, according to CoinMarketCap.
While Zhao is now barred from an executive role at Binance, reports suggest he retains his position as a shareholder and maintains majority ownership in the company.
Binance has faced legal challenges before, notably in June when it was accused of operating illegally in the United States.
This legal scrutiny aligns with a broader trend, as crypto exchanges like FTX, Coinbase, and Kraken have also faced investigations by the Security Exchange Commission (SEC). With the rise of Web3, justice appears to be increasingly stringent against illegal activities in the crypto domain.
Globally, governments are taking actions to safeguard users from fraud and other illegal activities. Notably, China recently classified NFT theft as a criminal activity, aligning it with other illegal actions and signaling a proactive approach to prevent such activities.