Binance CEO Changpeng Zhao Steps Down, Pleads Guilty to Money Laundering Violations

MOSCOW (Sputnik) - Changpeng Zhao announced on Tuesday that he would step down as the CEO of Binance after he pleaded guilty to money laundering violations, marking a stunning effort by the US government to clamp down on the cryptocurrency industry.

Zhao detailed in a social media post that his replacement for the post would be Richard Tend, who previously served as Binance’s former global head of regional markets.

“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,” Zhao wrote on X.

"I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself … I’m pleased to announce that Richard Teng, our now former Global Head of Regional Markets, has been named the new CEO of Binance today."

Moment earlier, US Attorney General Merrick Garland revealed that the US Justice Department had secured felony guilty pleas from Binance and Zhao, and that the department would be requiring the crypto firm to pay $4.3 billion.

"Binance has agreed to plead guilty to willfully violating the Bank Secrecy Act, knowingly failing to register as a money transmitting business and willfully violating the international Emergency Economic Powers Act," Garland said during a news conference. "The Justice Department is requiring Binance to pay $4.3 billion in penalties and forfeitures."

In addition to stepping down from his post and pleading guilty to willfully violating the Bank Secrecy Act, the deal also required Zhao to pay a $50 million fine. Zhao, who presently faces up to 18 months in prison, will be barred from engaging in any work with Binance for a period of three years once a monitor is selected.

The fine amounts were made under an agreement that reached settlements with not only the Justice Department but the US Department of Treasury and the Commodity Futures Trading Commission.

Weighing in on the development, Treasury Secretary Janet Yellen remarked that the Binance fallout was a clear message to the cryptocurrency industry against malpractice and underscored the Treasury Department is prepared to use all available tools to combat illicit finance.

"If virtual currency exchanges and financial technology firms wish to realize the tremendous benefits of being part of the US financial system and serving U.S. customers, they must play by the rules. And if they do not, the US government will take action," Yellen said. "This will make all of us safer."

The Tuesday results bring an end to the department's three-year probe into Binance. US government officials have worked to clamp down on crypto elites more recently since the November 2022 collapse of FTX, of which Zhao was an investor in early on.