Tuesday, June 18, 2024
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HomeNewsBinance CEO Steps Down, Set to Plead Guilty to Federal Charges 

Binance CEO Steps Down, Set to Plead Guilty to Federal Charges 

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Yet another major hurricane has hit the crypto industry. This time, it is Binance, the world’s largest crypto exchange platform, that is in the eye of the storm. 

After dozens of overwhelming charges brought against the company by the Department of Justice, its billionaire CEO and founder, Changpeng Zhao, has just resigned and will plead guilty to several frightening charges bordering on money laundering and even terrorism. 

The Chinese-born businessman announced his decision to step down this evening on his X (formerly Twitter) account. “Today, I stepped down as CEO of Binance,” the post began – an announcement that has sent shockwaves across the crypto community. 

In the statement, Zhao admitted to his role in the saga and disclosed that his decision to resign was in the best interest of the company. “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. This is best for our community, for Binance, and for myself,” he stated. 

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Zhao has however disclosed that he will remain a shareholder in the company, which will now be led by Richard Teng, the former head of the exchange’s regional markets. 

Trouble began for the crypto exchange giant and its boss when the Commodities Futures Trading Commission filed a suit against the firm and Mr. Zhao in March. The suit alleged that the company failed to implement anti-money laundering measures to forestall terror financing. 

As a result, the company looked the other way as narcotics traffickers, child abusers, and terror organizations such as Al Qaeda, ISIS, and Hamas made loads of suspicious transactions under its nose. 

The SEC also brought tens of charges against the company and its founder, which include mishandling customer funds and running an illegal securities exchange. 

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The SEC accused Binance of acting irresponsibly by commingling customer funds with Binance’s money. In a statement by Gary Gensler, SEC chair, he accused the company of engaging in an “extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law.” 

To make amends for its sins, Binance will forfeit $2.5 billion to the government and pay a fine of $1.8 billion. Also, according to the plea agreement reached by Zhao with the Department of Justice, the Treasury Department, and the Commodities Futures Trading Commission, he will plead guilty to causing a financial institution to violate the Bank Secrecy Act. The Department of Justice will also convince the court to impose a $50 million fine on Zhao. 

According to Attorney General, Merrick B. Garland, who is proud of the outcome of the case, “Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed – now it is paying one of the largest corporate penalties in U.S. history.” 

“In just the past month, the Justice Department has successfully prosecuted the CEOs of two of the world’s largest cryptocurrency exchanges in two separate criminal cases. The message here should be clear: using new technology to break the law does not make you a disruptor, it makes you a criminal,” the Attorney General stressed. 

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Commenting on the situation, the IRS Chief of Criminal Investigations believes that this case will serve as a deterrent to other crypto exchanges and market players who may be tempted to place growth over compliance. 

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