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Binance’s Chief Zhao Pleads Guilty, Steps Down To Settle US Illicit Finance Probe

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Changpeng Zhao, the CEO of Binance, resigned and entered a guilty plea to violating US anti-money laundering laws, according to authorities on Tuesday as part of a $4.3 billion settlement that ended a years-long investigation into the largest cryptocurrency exchange in the world.

Prosecutors characterized the agreement, in which Zhao will pay $50 million personally, as one of the biggest corporate fines in American history. It is yet another setback for the probe-plagued cryptocurrency sector, following the recent fraud conviction of FTX founder Sam Bankman-Fried.

However, a number of legal experts stated that Zhao was fortunate to have his enormous wealth preserved and to be able to keep his ownership of Binance, the exchange he started in 2017.

Unlike crypto trading spain Binance violated US anti-money laundering and sanctions laws and neglected to disclose over 100,000 suspicious transactions with groups the US designated as terrorists, such as Hamas, al Qaeda, and the Islamic State of Iraq and Syria.

The exchange was one of the biggest receivers of ransomware proceeds, they said, and it never reported transactions with websites selling materials on child sexual abuse.

“Binance made it easy for criminals to move their stolen funds and illicit proceeds on its exchanges,” U.S. Attorney General Merrick Garland said on Tuesday. “Binance also did more than just fail to comply with federal law. It pretended to comply.”

A portion of the charges—both criminal and civil—have to do with actions that Reuters first covered in a string of articles in 2022.

The Justice Department is requesting that Zhao serve the maximum 18 months in prison allowed by federal guidelines. The Justice Department negotiated the settlement with the Treasury Department and the Commodity Futures Trading Commission (CFTC), according to New York Times.

The CFTC announced that it has charged Samuel Lim, the former chief compliance officer of Binance. Requests for comments were not answered by Lim’s attorneys or himself.

Prosecutors said that as part of the agreement, Binance will forfeit an additional $2.51 billion and pay $1.81 billion within the next 15 months.

The billionaire Zhao was born in China and immigrated to Canada when he was twelve years old. In a Seattle court on Tuesday afternoon, he entered a guilty plea.

Authorities have been looking into Zhao and Binance for years, but Zhao’s departure is a significant change for Binance and one of the most influential people in the cryptocurrency space. The transaction casts doubt on the future of the cryptocurrency exchange that he has tight control over.

According to Zhao’s post, Binance’s longtime executive Richard Teng will take over.

“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.

In a separate statement, Teng said that his focus would be on “reassuring users that they can remain confident in the financial strength, security and safety of the company.”

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