Crypto kingpin pleads guilty: The case against Binance founder
Binance's founder and CEO, Changpeng Zhao, has admitted to violating US anti-money laundering regulations as part of a $4.3 billion settlement (Rs. 35,825 crore). He stepped down from his post, resolving a years-long investigation into the world's leading cryptocurrency exchange. As part of one of the largest corporate fines in US history, Zhao will personally pay $50 million (Rs. 416 crore). This development comes after the recent conviction of FTX founder Sam Bankman-Fried for fraud.
Binance's violations and consequences
US officials disclosed that Binance breached anti-money laundering and sanctions laws by neglecting to report over 1,00,000 dubious transactions involving groups such as Hamas, al Qaeda, and the Islamic State of Iraq and Syria. Additionally, the exchange failed to report dealings with websites distributing child sexual abuse materials and was a major recipient of ransomware payments. US Attorney General Merrick Garland remarked, "Binance made it easy for criminals to move their stolen funds and illicit proceeds on its exchanges."
Zhao's potential prison sentence and Binance's penalties
The US Department of Justice is advocating for an 18-month prison term for Zhao, which is the maximum recommended under federal guidelines. Binance is required to pay $1.81 billion (Rs. 15,000 crore) within 15 months and forfeit an additional $2.51 billion (Rs. 20,830 crore) as part of the agreement. After resigning as CEO, Zhao tweeted, "I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself."
Take a look at Zhao's post
Richard Teng takes over as Binance CEO
Following Zhao's resignation, longtime Binance executive Richard Teng will assume the role of CEO, Zhao announced in his post on X. Binance released a statement acknowledging its accountability for past criminal compliance violations and expressing its commitment to moving forward. Teng separately emphasized that his priority would be "reassuring users that they can remain confident in the financial strength, security, and safety of the company."
Zhao released on $175mn bond, will be sentenced in February
Soon after arrest, Zhao was released from custody on a $175 million (Rs. 1,458 crore) personal recognizance bond. The terms of Zhao's release bar him from breaking the law, tempering with witnesses or victims or taking any non-prescribed controlled substances. These are just normal provisions in a bond release. The order also appears to allow Zhao to leave the US, saying he has to return 14 days prior to sentencing. The sentencing hearing has been set for February 23, 2024.
