worldcoinindex.com
The CEO of Binance, the world's largest cryptocurrency exchange, is set to resign and plead guilty to violating U.S. anti-money-laundering laws in a bid to reach a deal that could safeguard the company's ongoing operations, sources familiar with the matter have disclosed.
Changpeng Zhao, who founded Binance in 2017 and transformed it into a pivotal player in the global cryptocurrency market, is expected to enter his plea in a Seattle federal court. As part of the agreement, Binance, under Zhao's ownership, will also plead guilty to a criminal charge and pay fines amounting to $4.3 billion. This sum includes settlements for civil allegations made by regulators.
The resolution of this deal would mark the conclusion of protracted investigations into Binance, with the company grappling with the aftermath of FTX's collapse, one of its main offshore competitors. Executives have departed, and layoffs have occurred amid the company's struggles with U.S. probes.
While the agreement would allow Zhao to maintain majority ownership of Binance, he would be barred from holding an executive position within the company. Sentencing for Zhao would be determined at a later date. The scenario echoes a prior case involving BitMEX executives, where a guilty plea resulted in a probationary sentence rather than imprisonment.
It's noteworthy that the announced deal does not cover a settlement with the Securities and Exchange Commission (SEC), which sued Binance and Zhao in June for allegedly violating U.S. investor-protection laws. Major cryptocurrency exchanges, including Binance, have chosen to contest such allegations, aiming to demonstrate that cryptocurrencies fall outside the SEC's regulatory purview.
The Department of Justice's (DOJ) investigation focused on Binance's anti-money-laundering program and whether it permitted individuals from sanctioned countries to trade with Americans. The settlement does not encompass the SEC's lawsuit but includes resolving a civil suit by the Commodity Futures Trading Commission (CFTC), which accused Binance of lacking measures against terrorist financing and money laundering. The $4.3 billion settlement covers claims by both the CFTC and Treasury Department agencies.
Zhao, residing in the United Arab Emirates, limited his travels this year. The lack of a mutual extradition treaty between the U.A.E. and the U.S. was a significant aspect in negotiations between the government and Binance, with the country remaining receptive to cryptocurrencies despite global regulatory crackdowns.