Breaking News!! Binance's CEO CZ Resigns

According to court documents, Changpeng Zhao, popularly known as “CZ,” is poised to step down as Binance's CEO as part of a plea agreement with the U.S. Department of Justice. Zhao is set to admit guilt to Bank Secrecy Act violations and face a $50 million fine.

On a larger scale, Binance itself is admitting guilt to multiple charges, encompassing operating an unlicensed money transmitting business and breaching sanctions by servicing Iran without the necessary U.S. authorization. The company commits to full cooperation with the government regarding the outlined conduct, confronting significant financial penalties totaling a $1.8 billion fine and forfeiture of $2.5 billion.

The filing indicates that Binance has accepted Zhao's resignation as CEO, with a stipulation prohibiting his involvement in the business for three years starting from the plea acceptance date or until a monitor is appointed.

Following this development, Binance's cryptocurrency, BNB token, experienced an immediate 7.2% decline. The DOJ's investigation into Binance, involving other executives, has been ongoing since 2018, conducted by various prosecutorial bodies like the Money Laundering and Asset Recovery Section and the National Cryptocurrency Enforcement Team.

Internally, discussions at Binance had considered Zhao's potential resignation as a step that could potentially bolster the company's standing amid its legal challenges. Beyond the DOJ's investigation, Binance has grappled with regulatory scrutiny linked to U.S. sanctions on Russia, culminating in the sale of its Russian entity to CommEX in September.

This settlement arrives amidst Binance's navigation through regulatory hurdles in the U.S. and Europe, including unsuccessful regulatory approval leading to an exit from the Netherlands, deregistration in Cyprus, and an ongoing probe in France. The plea deal and Zhao's departure mark a crucial juncture for the company as it tackles these extensive legal and regulatory obstacles.

The DOJ has been investigating Binance over concerns related to money laundering and sanctions breaches. Earlier this year, Binance faced legal action from the CFTC, while the SEC lodged civil charges against Binance entities and Zhao in June, focusing on deceptive practices, conflicts of interest, and avoidance of legal responsibilities.

Furthermore, the DOJ's national security division probed potential violations of U.S. sanctions by Binance or its executives concerning Russias actions in Crimea and Ukraine. This investigation stands apart from the ongoing DOJ criminal inquiry into Binance's compliance with anti-money laundering and tax laws.

In light of CZs departure from Binance, Richard Teng is poised to step into the role of CEO. In a social media announcement, Zhao acknowledged his departure, expressing the emotional difficulty of the decision and stressing the importance of accountability. He affirmed his commitment to offer guidance as a shareholder and former chief executive within the confines of the agreements with U.S. agencies.

Teng, previously overseeing Binances Global Head of Regional Markets, outlines his objectives, which encompass bolstering user trust in the platform, fostering collaboration with regulatory bodies to balance innovation and consumer protection, and propelling web3 growth through strategic partnerships.

Prior to joining Binance, Teng held key leadership roles in various financial institutions, including the Singapore Exchange Ltd, the Monetary Authority of Singapore, and the Abu Dhabi Global Market.

While appointed to oversee Binance's regional markets outside the U.S. in May, Teng commenced his journey with the crypto giant as CEO of its Singapore operations in August 2021.

Apart from the shifts in leadership, the settlement mandates Binance to enlist an independent compliance monitor. As part of Zhao's plea agreement, he is forbidden from holding any operational position within Binance for three years after the monitor's appointment.

Although Zhao steps away from his executive responsibilities and faces restrictions in engaging with the company‘s operations, he retains the majority stake in Binance. As the world’s largest cryptocurrency exchange by trading volume, this arrangement permits him to maintain ownership while the company addresses the repercussions of the DOJs investigation and endeavours to achieve regulatory adherence.