CZ Settles with U.S. Regulators, Agrees to $4.3B Fine, Resigns as Binance CEO

On November 22nd, according to sources cited by The Wall Street Journal, Binance CEO Changpeng Zhao, also known as CZ, is scheduled to appear in a federal court in Seattle. He plans to resign and admit to criminal charges, including violating U.S. anti-money laundering requirements, which may allow Binance to continue operating. At the same time, Binance is expected to plead guilty to criminal charges and agree to pay a total of $4.3 billion in fines, including $3.4 billion to the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury and $968 million to the Treasury's Office of Foreign Assets Control. Zhao will retain the majority of his ownership in Binance but will be unable to hold any executive positions in the company.

According to a Bloomberg report on the same day, Binance faces three charges, including violating anti-money laundering regulations, conspiring to conduct unlicensed money transfer business, and violating U.S. sanctions.

The U.S. Treasury Department stated that Binance's misconduct includes failing to prevent and report suspicious transactions related to terrorist organizations, including Hamas, the Palestinian Islamic Jihad, Al-Qaeda, and the Islamic State in Iraq and Syria (ISIS). Court documents reveal that Binance allowed at least 1.1 million related transactions, totaling over $898 million, involving Iranian customers.

In a press release, U.S. Treasury Secretary Janet Yellen stated, “Binance turned a blind eye to its legal obligations in pursuit of profit. Binance chose growth over compliance with U.S. legal requirements. Binance completed billions of dollars in transactions without collecting necessary customer information or monitoring transactions.”

Settlement Outcome

• Binance will pay a total of $4.3 billion in fines and will completely withdraw from the United States.

• The U.S. Department of the Treasury will retain access to Binance's books, records, and systems for a period of five years.

• CZ will resign as the CEO of Binance and is expected to face a prison term of no more than 18 months.

Official Response



Binance has issued an announcement stating that it has reached a settlement with U.S. regulatory authorities. Additionally, during the regulatory investigation, there were no accusations of Binance misappropriating any user funds or engaging in market manipulation.

CZ (Changpeng Zhao), in a statement, mentioned that Richard Teng, the former Head of Global Markets at Binance, will succeed him as the CEO. Before joining Binance, Richard served as the CEO of the Financial Services Regulatory Authority at Abu Dhabi Global Market (ADGM), Chief Regulatory Officer at the Singapore Exchange (SGX), and Director of Corporate Finance at the Monetary Authority of Singapore, bringing over 30 years of financial services and regulatory experience to the role.



Market Response



As the news gradually unfolded, the price of BNB experienced a maximum decline of 15%. In terms of overall sentiment, including DiscusFish, the founder of F2Pool, and Brian Armstrong, the CEO of Coinbase, there is a consensus that Binance's settlement with regulatory authorities marks the beginning of a new era for the

cryptocurrency

industry. The significance lies in the industry moving towards greater compliance, paving the way for the approval of ETFs by eliminating obstacles.