Zhao Changpeng, the crypto king and Binance chief, ousted for US crimes
LONDON: The most powerful man in crypto has lost his crown – and could see his freedom curtailed as well.
Binance chief Zhao Changpeng on Tuesday (Nov 21) stepped down and pleaded guilty to breaking US anti-money laundering laws as part of a US$4.3 billion settlement resolving a years-long probe into the world’s largest crypto exchange, prosecutors said.
The deal with the Justice Department, part of a large settlement between Binance and other US agencies, resolves criminal charges for conducting an unlicensed money transmitter business, conspiracy and breaching sanctions regulations.
It also leaves Zhao’s future uncertain.
“Today, I stepped down as CEO of Binance,” Zhao tweeted. “Admittedly, it was not easy to let go emotionally. But I know it is the right thing to do. I made mistakes, and I must take responsibility.”
Zhao, known as CZ, will personally pay US$50 million and is barred from all involvement with Binance.
US sentencing guidelines call for prison time of 10 to 18 months for the charges he faces. Prosecutors are seeking an 18-month prison sentence, the New York Times reported.
Zhao and his lawyers did not return calls seeking comment.
LOFTY AMBITIONS
After launching Binance in Shanghai in 2017, Zhao dreamed big. “We want to take over the entire market!” he told staff in a company chat group that year.
The 46-year-old CEO did not waver in his belief as he built up his crypto exchange. Even this year, Zhao felt a major goal was within reach.
“The idea that a five-year-old start-up could mature and operate at the same level as a financial institution that has been around for 200 years was once impossible to fathom,” Zhao wrote in January in a review of the previous year. “But we are nearly there today.”
In that review, Binance hailed its progress in complying with regulations across the world. The exchange had strived through the year to strengthen client checks, it said, developing crypto’s “best security and compliance team.”
Zhao’s public aim to be a part of all that has been dashed by Tuesday’s guilty plea and settlement.
“By failing to comply with US law, Binance made it easy for criminals to move their stolen funds and illicit proceeds on its exchanges,” US Attorney General Merrick Garland said on Tuesday. “Binance also did more than just fail to comply with federal law. It pretended to comply.”
