Changpeng Zhao, the founder and CEO of Binance, has agreed to step down following his guilty plea to a series of violations brought against him by the U.S. Department of Justice (DOJ) and other U.S. agencies.
He appeared in a Seattle federal court on Tuesday to enter his plea.
Richard Teng, Binance’s former global head of regional markets, will be the exchange’s new CEO, Zhao shared in a post on X Tuesday afternoon. Teng previously was the CEO of the Financial Services Regulatory Authority at Abu Dhabi Global Market, among other executive roles. In response to stepping down, Zhao said, “it is the right thing to do” adding, “I made mistakes, and I must take responsibility.” Zhao will remain a shareholder and said he will be “available to the team to consult as needed.”
Binance, the world’s largest crypto exchange, has also agreed to pay about $4.3 billion to resolve the DOJ’s investigations, the agency said in a press release on Tuesday.
As a part of Binance’s guilty plea, it has also reached agreements with the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), the Office of Foreign Assets Control (OFAC) and the Commodity Futures Trading Commission (CFTC) and will credit about $1.8 billion toward those resolutions.
The crypto exchange “admits it engaged in anti-money laundering, unlicensed money transmitting and sanctions violations,” the DOJ release stated, calling it the “largest corporate resolution” that included criminal charges for an executive. Zhao pleaded guilty to failing to maintain an anti-money laundering program.
“The message here should be clear: using new technology to break the law does not make you a disruptor, it makes you a criminal,” U.S. Attorney General Merrick Garland said in a statement.
Binance, Zhao and other related parties “knowingly failed to register as a money services business” and violated the Bank Secrecy Act by failing to implement an anti-money laundering program, a filing on the charges stated. It added that the respective parties allegedly violated U.S. economic sanctions “in a deliberate and calculated effort to profit from the U.S. market,” without following U.S. laws.
The crypto exchange collected about $1.35 billion in trading fees from U.S. customers, according to Chairman Rostin Behnam of the CFTC. According to court documents, Zhao told Binance employees it was “better to ask for forgiveness than permission” and prioritized the exchange’s growth there over complying with U.S. law.
“Any institution, wherever located, that wants to reap the benefits of the U.S. financial system must also play by the rules that keep us all safe from terrorists, foreign adversaries, and crime or face the consequences,” Secretary of Treasury Janet Yellen said in the release.
Under Zhao’s plea agreement, he will agree to the recommendation that the court impose a $50 million fine to the CFTC and won’t make any statements “contradicting his acceptance of responsibility,” according to a separate filing from Monday.
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