Changpeng Zhao (CZ) Resigns as Binance CEO Amid $4 Billion Settlement with DOJ | Blockster

In a significant development, Changpeng "CZ" Zhao, the founder and CEO of Binance, is stepping down from his role as part of a monumental $4 billion settlement with the U.S. Department of Justice (DOJ). Sources close to the negotiations revealed that this settlement will also involve the Commodities Futures Trading Commission (CFTC), with the Securities and Exchange Commission (SEC) notably not participating in the agreement.

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As part of the settlement terms, Zhao will plead guilty to anti-money laundering charges brought by the DOJ. The plea is scheduled to take place in federal court in Seattle on Tuesday afternoon, according to reports from the Wall Street Journal.

At the time of publication, Binance, the DOJ, CFTC, and SEC had not provided comments in response to requests for clarification.

The SEC had previously charged Binance and its founder CZ in June with operating an unregistered exchange and misleading investors. The charges included allegations that Binance utilized a Switzerland-based fund, Sigma Chain (also owned by CZ), to artificially boost trading volume on Binance's U.S. platform.
SEC Chair Gary Gensler had stated in June, "Through thirteen charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law."
This action by the SEC was followed by charges from the CFTC, which also accused Binance of offering crypto derivatives to U.S. citizens without proper registration as a futures commodity merchant.

On Monday, Bloomberg reported that Binance was on the verge of finalizing a $4 billion settlement with the Justice Department, potentially bringing an end to a DOJ investigation that had been ongoing since at least 2018. Federal prosecutors had reportedly requested files and messages related to Binance's U.S. customers in late 2020.

Crypto Investors Welcome Potential Binance Probe Resolution

Crypto investors have welcomed the prospect of a resolution of a long-running U.S. criminal investigation into Binance, reckoning any deal that allows the major exchange to continue operating would remove a nagging risk to the wider market.

Bitcoin, the top crypto and a barometer for wider sentiment, was unmoved by the news and was on Tuesday trading down about 2.6%. Binance's in-house token BNB, the fourth-biggest digital coin, climbed 4.6% on Tuesday, adding to gains of as much as 6% a day earlier.

The market reaction reflects an expectation that a $4 billion payment would be manageable for Binance, four crypto investors and market participants said. Such a settlement would allow Binance to continue to operate, sparing the market a sell-off sparked by any chaotic unwinding, two of the people said.
"We see this news as a positive development," said Anatoly Crachilov, chief executive of London-based Nickel Digital Asset Management, a client of Binance.
A settlement of around $4 billion is "something that potentially Binance can handle," Crachilov said, citing publicly available information on its trading volumes and commissions as evidence that it has been "generating billions."

The exact extent of Binance's cash reserves is unknown. As a private company, it does not disclose basic financial information such as revenue and profit. It has said it is profitable and debt-free.