Binance CEO pleads guilty, resigns in $4.3bn US settlement

The chief of the world's largest crypto exchange, Binance, has agreed to step down and plead guilty to violating US anti-money laundering laws, as part of a $4.3 billion settlement with federal authorities.

Changpeng Zhao, also known as CZ, admitted to facilitating transactions with terrorist groups, child abuse websites, and ransomware hackers on Binance, which he founded in 2017.

He will pay $50 million personally and face an 18-month prison sentence, according to the New York Times.

Binance will pay $1.81 billion within 15 months, and a further $2.51 billion forfeiture as part of the deal, which was announced on Tuesday by the Justice Department, the Commodity Futures Trading Commission (CFTC), and the Treasury Department.

The settlement is one of the largest corporate penalties in US history and marks a major blow to the crypto industry, which has been under increasing scrutiny and regulation.

Binance's former chief compliance officer, Samuel Lim, was also charged by the CFTC for failing to implement an effective anti-money laundering program.

"Binance made it easy for criminals to move their stolen funds and illicit proceeds on its exchanges," US Attorney General Merrick Garland said in a statement. "Binance also did more than just fail to comply with federal law. It pretended to comply."

Zhao, a billionaire who was born in China and moved to Canada at the age of 12, pleaded guilty in a Seattle court on Tuesday.

"Today, I stepped down as CEO of Binance," Zhao said on social media after the settlement was announced. "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."

Zhao is worth $10.2 billion, according to Forbes.

Richard Teng – new CEO of Binance

Richard Teng, a longtime Binance executive, will take over as the new CEO of Binance, Zhao said in his post.

"These resolutions acknowledge our company’s responsibility for historical, criminal compliance violations, and allow our company to turn the page," Binance said in a statement.

The settlement comes after Reuters reported in a series of articles in 2022 that Binance had been under investigation by the Justice Department since at least 2018 for breaking US anti-money laundering and sanctions laws.

Some of the charges relate to practices that Reuters reported first, such as Binance's internal acknowledgment that it facilitated "potentially illegal activities" and its failure to report transactions by the militant Palestinian group Hamas.

Several legal experts said that Zhao and Binance got a relatively good deal, considering the seriousness of the violations and the possibility that they could have faced more severe charges or penalties.