Changpeng Zhao, the CEO of Binance has resigned and entered a guilty plea to violating US anti-money laundering rules, according to authorities on Tuesday.
This comes as part of a $4.3 billion (Ksh 655 billion) settlement that ended a years-long investigation into the largest cryptocurrency exchange in the world. Prosecutors characterized the settlement, in which Zhao would pay $50 million personally, as one of the biggest corporate fines in American history. It is just another setback for the probe-plagued cryptocurrency sector, following the recent fraud conviction of FTX creator Sam Bankman-Fried.
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Authorities alleged that Binance violated US anti-money laundering and sanctions rules and neglected to disclose over 100,000 suspicious transactions with entities the US designated as terrorists, such as Hamas, al Qaeda, and the Islamic State of Iraq and Syria. The exchange was one of the biggest receivers of ransomware proceeds, they added, and it never reported transactions with websites offering materials on child sexual abuse.
U.S. Attorney General Merrick Garland stated on Tuesday that “Binance made it easy for criminals to move their stolen funds and illicit proceeds on its exchanges.” “Binance did more than only break the law at the federal level,” he added.
Federal authorities must now be notified of any questionable action by Binance. “This will advance our criminal investigations into malicious cyber activity and terrorism fundraising, including the use of cryptocurrency exchanges to support groups such as Hamas,” according to the Justice Department.
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The company’s head of regional markets, Richard Teng, has been appointed as the new CEO. Changpeng Zhao stated in a post on X that it was “not easy to let go emotionally.”
