WASHINGTON, D.C./DUBAI/SEATTLE (The Thursday Times) — The CEO of Binance, the world’s largest cryptocurrency exchange, is poised to resign and admit to breaching U.S. anti-money laundering laws. This move is part of a deal which might allow the company to maintain its operational status. Changpeng Zhao, the CEO, plans to formally enter his guilty plea in a federal court in Seattle. In addition to Zhao’s plea, Binance, which he owns, will also admit to criminal charges and agree to pay a substantial $4.3 billion in fines, covering both criminal and civil allegations.
This agreement marks the conclusion of extensive investigations into Binance, a company Zhao founded in 2017 that rapidly became a key player in the global cryptocurrency market. The criminal investigation has been a dark cloud over the company, especially after the collapse of FTX, a major competitor, last year.
Binance has been under significant strain, with key executives departing and a reduction in its workforce amid the ongoing U.S. investigations. Under the terms of the deal, Zhao can retain his majority stake in Binance but must relinquish any executive role and will face sentencing later.
The situation mirrors a previous case involving BitMEX, another crypto exchange whose CEO, Arthur Hayes, pled guilty to similar charges and received probation.
The Department of Justice has not commented on the matter. Notably, this deal does not settle matters with the Securities and Exchange Commission (SEC), which has sued Binance and Zhao for alleged violations of U.S. investor-protection laws. Major crypto exchanges like Binance are opting to fight the SEC in court, contending that cryptocurrencies do not fall under the SEC’s jurisdiction.
The Justice Department’s investigation scrutinized Binance’s anti-money laundering measures and its dealings with individuals in sanctioned nations trading with Americans. Additionally, a separate settlement will address a civil lawsuit filed by the Commodity Futures Trading Commission (CFTC), which accused Binance of failing to prevent terrorist financing and money laundering. The $4.3 billion fine will cover claims from both the CFTC and Treasury Department agencies.
Zhao, who lives in the United Arab Emirates, had limited his travel this year. The U.A.E., known for its crypto-friendly stance, lacks a mutual extradition treaty with the U.S., though the two countries have an agreement enhancing law enforcement cooperation. Negotiations between the U.S. government and Binance were complicated by Zhao’s residency status.
