Binance CEO CZ to Step Down, Company to Plead Guilty and Pay $4.3 Billion in Anti-Money Laundering Case

Changpeng “CZ” Zhao, the founder of Binance, has reportedly agreed to step down as CEO as the United States Department of Justice (DOJ) announced a $4.3 billion settlement with the crypto exchange.

On November 21, Changpeng “CZ” Zhao entered a guilty plea, acknowledging several charges, including a criminal violation of Anti-Money Laundering statutes. As part of this landmark settlement, CZ retains his majority stake in Binance but relinquishes any executive position within the company.

Reportedly, CZ appeared before a federal court in Seattle on the same day, concluding a protracted legal saga that began in 2018. The U.S. Department of Justice (DOJ) has scheduled a press conference for 3:00 p.m. ET on Tuesday, where the settlement details are expected to be outlined.

The high-profile DOJ press conference will feature prominent figures such as Attorney General Merrick Garland, Treasury Secretary Janet Yellen, Deputy Attorney General Lisa Monaco, and Commodity Futures Trading Commission Chairman Rostin Behnam.

Notably, the enforcement actions unveiled by the DOJ include criminal charges against Binance, encompassing conspiracy, conducting unlicensed money-transmitting business, and violating the International Emergency Economic Powers Act, while announcing a $4.3 billion settlement with the exchange.

While the settlement does not impact ongoing litigation with the U.S. Securities and Exchange Commission (SEC), it resolves Binance’s issues with the Commodity Futures Trading Commission (CFTC). The reported $4.3 billion settlement includes funds allocated to the CFTC’s case and outstanding claims from the U.S. Treasury Department.

Binance Founder CZ Faces Plea Deal Amidst Regulatory Troubles

Binance, founded in 2017, is grappling with significant regulatory challenges, with the latest development being the reported plea deal of its founder, Changpeng “CZ” Zhao. The SEC has accused Binance of violating federal securities law, misusing investor funds, and operating as an unregulated exchange. Gary Gensler, Chair of the SEC, characterized Binance’s actions as an “extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law.”

The regulatory pressures have led to a series of resignations and layoffs at Binance, with senior executives leaving the company, including Chief Risk Officer Sidney Majalya, Head of Legal Krishna Juvvadi, and President and CEO Brian Shroder.

The exchange also reportedly laid off over 1,000 employees earlier this year in response to increased regulatory scrutiny. The Department of Justice is expected to hold a press conference to address the news of CZ’s plea. The sentencing details remain unclear at this time.