Changpeng Zhao, CEO of Binance, Has Pleaded Guilty to Criminal Charges Brought By The U.S. Department of Justice
/ Binance CEO Changpeng Zhao pleads guilty to U.S. criminal charges. Resignation, $175M bond, and pending SEC case mark a pivotal moment in crypto’s landscape.
By Coinsprobe.
Date: 22 Nov 2023, 08:40 AM IST
Changpeng Zhao, widely known as “CZ” and the CEO of Binance, the world’s largest cryptocurrency exchange, has pleaded guilty to criminal charges filed by the U.S. Department of Justice. The U.S. Justice Department, Treasury, and CFTC officials have accused Binance of lacking basic safeguards against sanctions, with CZ allegedly committing criminal acts.
“In a Nov. 21 press conference, Attorney General Merrick Garland announced that CZ entered his plea in person in U.S. federal court despite residing outside the country. He added that a $4.3-billion settlement with Binance and CZ would cover “civil regulatory enforcement actions” by government departments including the U.S. Treasury and Commodity Futures Trading Commission (CFTC).
As a consequence of the legal proceedings, CZ has announced his resignation as CEO. Richard Teng, Binance’s global head of regional markets, is set to take over the position.
Changpeng Zhao Statement:
CZ, addressing the community, acknowledged his mistakes and emphasized the importance of taking responsibility. He stated, “This is best for our community, for Binance, and for myself,” adding that he has had no real break for over six and a half years.
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.
— CZ 🔶 Binance (@cz_binance) November 21, 2023
Binance is no longer a baby. It is…
Notably, CZ proudly pointed out that the allegations did not involve Binance misappropriating user funds or engaging in market manipulation.
According to the indictment filed on November 14, CZ faces charges related to the failure to maintain an effective Anti-Money Laundering program at Binance, violating the Bank Secrecy Act. The court records remained sealed from November 14 to 21, following motions from prosecutors and mutual agreement.
The settlement between U.S. officials and Binance marks the conclusion of various civil and criminal investigations into the exchange spanning several months. However, Binance still faces a pending civil case with the U.S. Securities and Exchange Commission, involving securities law violations.
Binance founder Changpeng “CZ” Zhao will pay a $175 million release bond
As part of the settlement, CZ will pay a $175 million release bond and commit to returning to the United States 14 days before his sentencing on February 23, 2024. This agreement potentially allows him to return to Dubai.
In a bond document filed in a Seattle federal court, Zhao agreed to disclose his residence and acknowledged the possibility of an arrest warrant if he fails to appear for the court date. Failure to appear carries a hefty $250,000 fine and a maximum sentence of 10 years in jail.
Conclusion:
Changpeng Zhao, CEO of Binance, has pleaded guilty to criminal charges filed by the U.S. Department of Justice. This unexpected development has led to CZ’s resignation, with Binance expressing satisfaction in reaching a resolution with U.S. authorities. Despite the legal troubles, CZ emphasized no misappropriation of user funds or market manipulation by Binance.