Binance: Changpeng Zhao aka CZ resigns and crypto exchange pays 4.3 Billion to the USA

The world’s largest cryptocurrency exchange Binance announces in the USA Violations of money laundering laws and will pay a fine worth billions. Founder and boss step in at the same time Changpeng Zhao (46) resigned from his positions.

Changpeng Zhao must leave the company entirely for three years, according to court documents released Tuesday. He will also pay a personal fine of $50 million. For Binance in total, around 4.3 billion dollars are due, the equivalent of around 3.95 billion euros.

It is one of the largest sums ever imposed on a company in the United States. At the same time, one of the most dazzling and powerful figures, Zhao, often just called “CZ” in the scene, is leaving her post. At least since the fall of the former rival, the FTX founder, who has since been found guilty of fraud and money laundering Sam Bankman-Fried (31), Changpeng Zhao was the outright market leader. Now he is probably leaving the company he founded forever.

Changpeng Zhao wrote on the online platform X that he no longer sees himself as the head of a start-up in the future. He made mistakes that he now has to answer for. Taking over the head position at Binance Richard Tengwho was previously responsible for local markets.

Ties to terrorist groups and drug cartels

After years of investigation, the US judiciary and the US CFTC authority accused Binance and Zhao of having been active in circumventing money laundering and sanctions laws. Zhao and others are charged with violating the Bank Secrecy Act by failing to implement an effective anti-money laundering program and willfully violating U.S. economic sanctions “in a conscious and calculated effort to gain from U.S. market without implementing the controls required by U.S. law” the Justice Department said.

US Secretary of the Treasury Janet Yellen (77) said in a statement on Tuesday that Binance facilitated more than 100,000 transactions by illegal actors that supported terrorism and drug trafficking. There were more than 1.5 million virtual trades that violated US sanctions.

There have been transactions on Binance linked to terrorist groups Yellen said, noting that Binance “never made a single report about suspicious activity”. The US Department of Justice also said on Tuesday that Binance had “knowingly and intentionally” arranged to provide services to Iran in violation of US sanctions.

The dark lord of the crypto world

Changpeng Zhao is a controversial figure who is not only played a dubious role in the collapse of the FTX platform, when his public statements fueled the withdrawal of customer funds. The billionaire, who was born in China, moved to Canada at the age of 12 and is now believed to be living in the Gulf States, where there is no extradition treaty with the US. Personally, he has avoided traveling to the USA for years to avoid possible sanctions.

Binance was founded in Shanghai in 2017 and has become the largest platform in the industry primarily because it can place relatively unregulated crypto bets. The core exchange Binance.com processed a trading volume of $34 trillion in 2021, at the height of the crypto boom, Changpeng Zhao once said proudly.

For years he publicly railed against excessive regulation and narrow legislation. A lot of things about the company remained vague and opaque. Among other things, Binance, whose holding company is based in the Cayman Islands, never disclosed the location of its main exchange.

All of this fueled the regulators’ suspicions from the start, including in Europe. While the US exchange Coinbase presents itself as a somewhat boring but regulated platform, Zhao always advocated wild, decentralized business.

In the USA, the Securities and Exchange Commission (SEC) has also been investigating Binance for years; She was apparently not involved in the deal that has now been concluded.

Binance has now agreed to hand over $2.5 billion to the government and pay a fine of $1.8 billion.

Changpeng Zhao US competitor, Coinbase CEO Brian Armstrong (40), was happy open via X about the decision, which finally confirms our own, slower course: “We now have the chance to open up new capital for industry.”