SEATTLE––The CEO of Binance, which is the world’s largest cryptocurrency exchange, has exited the job after pleading guilty to violating anti-money-laundering requirements, while the company has agreed to pay a $4.3-billion as part of a deal that might preserve the company’s ability to continue operating.
CEO Changpeng Zhao appeared in Seattle federal court to enter the plea. Prosecutors had accused Binance, which Zhao owns, of facilitating transactions with sanctioned groups and also allowed U.S. users to obscure their location so the firm could avoid complying with U.S. anti-money-laundering laws.
FinCEN said Zhao has agreed to pay a criminal fine of $50 million, although that amount might be reduced based on separate civil penalties he has agreed to pay, court records cited by the Wall Street Journal show.
“I made mistakes, and I must take responsibility,” Zhao wrote on X. “This is best for our community, for Binance, and for myself.”
Long-Running Investigation
The Journal reported that Binance Coin, the exchange’s native token, fell 5.3% from its value a day earlier to $242, according to CoinDesk data.
The deal ends long-running investigations of Binance, which Zhao founded in 2017. The action follows the 2022 collapse of FTX.
FinCEN said Binance knew in 2018 that it had millions of U.S. users, but didn’t set up a program to detect money laundering or violations of sanctions laws. As a result, Binance processed trades between Americans and users believed to be in Iran valued at $899 million between January 2018 and May 2022, prosecutors said, according to the Journal.
Maximum of 18 Month Sentence
Zhao faces a maximum prison sentence of 18 months under federal sentencing guidelines. He will be sentenced at a later date. The deal allows Zhao to retain his majority ownership of Binance, although he won’t be able to have an executive role at the company, according to the Justice Department.
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