Changpeng Zhao, the founder and CEO of Binance, the world's largest cryptocurrency exchange, has pleaded guilty to felony charges related to his failure to prevent money laundering on the platform. As part of his plea, Zhao has stepped down as CEO and named Richard Teng, former CEO of Abu Dhabi Global Market, as his successor.
The charges against Zhao, both criminal and civil, relate to practices that allowed criminals to move stolen funds and illicit proceeds on Binance's exchanges. The U.S. Treasury announced these as the 'largest settlements in history' with Binance. The company has agreed to pay a total of $4.3 billion in settlement, with Zhao personally contributing $50 million. This settlement is one of the largest corporate penalties in U.S. history.
Binance was found to have violated U.S. anti-money laundering and sanctions laws and failed to report over 100,000 suspicious transactions. These transactions included dealings with organizations described as terrorist groups, such as Hamas, and websites selling child sexual abuse materials. The exchange was also a major recipient of ransomware proceeds.
As part of the settlement agreement, Binance has admitted to facilitating illegal transactions. The agreement also puts the platform under a five-year mentorship and ensures its complete exit from the U.S. market. Binance's former chief compliance officer, Samuel Lim, was also charged by the Commodity Futures Trading Commission (CFTC) in relation to these violations.
Despite these charges, Zhao emphasized that U.S. agencies did not allege Binance had misappropriated user funds or engaged in market manipulation. The settlement resolves a long-standing investigation into the world's largest crypto exchange.