The management of the world's largest cryptocurrency exchange Binance has entered into an agreement with the US authorities. The CEO is forced to resign from his post and, together with the company, pay compensation to the treasury for violating a whole series of laws.
Changpeng Zhao announced his resignation on Tuesday, November 21 — it was the height of the workday in the Western Hemisphere. Resignation and an obligation not to take part in the affairs of the exchange became one of the conditions of the deal..
“The businessman pleaded guilty to failing to maintain Anti-Money Laundering (AML) and Bank Secrecy Act (BSA) compliance,” the Justice Department announced..
Binance Holdings also pleaded guilty and agreed to pay $4.32 billion to resolve the investigation into violations of the BSA, the International Emergency Economic Powers Act (IEEPA) and failure to register as a money transfer operator..
The huge amount will be paid gradually, over approximately 15 months, and will go to several agencies, including the Commodity Futures Trading Commission (CFTC) and the Treasury Department. The ex-CEO will have to pay another $50 million personally..
Changpeng Zhao published a lengthy message to Binance clients, hastening to assure that their funds on the exchange are not in danger. The ex-CEO spoke vaguely about his future:
“If there are listeners, I am now ready to become a coach/mentor for a small number of aspiring entrepreneurs, privately. At least I can tell them what not to do.”
Binance's former director of regulatory compliance, Samuel Lim, remains under threat of criminal charges, Reuters writes, citing its sources. The US Department of Justice itself calls the deal the completion of a multi-year investigation into the activities of the trading platform. That is, the high-profile litigation with the US Securities and Exchange Commission (SEC), which began in June, is just a fraction of the troubles for the world’s largest crypto exchange.
The post of CEO of the exchange since November 21 is filled by Richard Teng, who held the position of head of regional markets at Binance.
Binance's native token BNB has dropped in price by about 6% over the past 24 hours.