coinpedia.org
Binance Founder CZ Zhao to Resign Following DOJ Settlement
Major Shift in Crypto Exchange Leadership Amid Legal Challenges
In a significant turn of events in the cryptocurrency world, Changpeng “CZ” Zhao, the CEO of Binance, is stepping down from his role. This decision is part of a major settlement with the Department of Justice (DOJ), amounting to $4 billion. This settlement also involves the Commodities Futures Trading Commission (CFTC), while the Securities and Exchange Commission (SEC) is not participating in the agreement.
Plea Agreement and Regulatory Scrutiny
Zhao is slated to plead guilty to anti-money laundering charges brought by the DOJ. This development is set to take place in a federal court in Seattle on Tuesday afternoon, as reported by the Wall Street Journal. The settlement marks the culmination of a DOJ investigation into Binance, initiated at least in 2018. Reuters highlighted that in late 2020, federal prosecutors requested Binance to provide documents and communications related to its U.S. customers.
SEC Charges and Advisory Board Formation
Earlier in June, the SEC charged Binance and Zhao with operating an unregistered exchange and misleading investors. The charges included using Sigma Chain, a Switzerland-based fund owned by Zhao, to inflate trading volumes on Binance’s U.S. platform. Gary Gensler, SEC chair, accused Zhao and Binance of engaging in a “web of deception.”
In response to the growing regulatory challenges, Binance announced the formation of a Global Advisory Board last September. The board is chaired by Max Baucus, a former U.S. Senator and Ambassador to China. It includes David Plouffe, former President Obama’s campaign manager, and Bruno Bézard, the former head of the French Treasury.
There have been no comments from Binance, the DOJ, CFTC, or the SEC regarding this development.