What Happened Today With Binance And CEO CZ?

Binance, the largest cryptocurrency exchange by trading volume was sanctioned late Tuesday by the Department of Justice (DoJ) for not adhering to anti-money laundering (AML) laws.

Binance has allegedly been the subject of an investigation by the US Department of Justice for the past five years due to allegations of money laundering, illegal money transfers, and breaking criminal penalties. Bloomberg claims, however, that the DoJ has now asked for a $4 billion settlement in the case.

What Happened to CEO CZ?

In response to the claims and charges, Binance CEO Changpeng Zhao stepped down as CEO of Binance.

Zhao resigned as CEO and entered a guilty plea to charges of failing to operate an efficient anti-money laundering system, according to the Department of Justice. Garland added that Zhao, who resides overseas, personally entered his plea in the United States.

Along with Zhao, the Commodities Futures Trading Commission (CFTC) accused Samuel Lim, Binance’s previous compliance officer, of breaking the Commodities Exchange Act and willfully encouraging Binance’s several infractions of the Act.

According to the CFTC’s website, Lim has consented to pay $1.5 million to resolve the allegations. The court must approve the suggested settlement. CZ was taken to custody immediately after he was found guilty of the same. However, later released on bail.

Instead of being allowed to travel to Dubai, Zhao will pay a $175 million release bond. Additionally, he consented to return to the United States 14 days before his sentence on February 23, 2024.

Zhao agreed to disclose to the court where he would reside after the bail. A warrant might be issued for his arrest if he does not appear for his scheduled court hearing in a bail application filed in a federal court in Seattle on November 21.

Missing court dates can result in a $250,000 fine and up to 10 years in prison.

Also Read: Is Binance Too Big to Fail? Insiders suggest Employees Are Nervous

Will Binance Survive the $4.3 Bln Penalty?

After the collapse of FTX in November 2022, Binance was reported to be responsible for 66% of trading activity. Notably, Binance is too big to collapse as cited by experts. The net revenue stood at $12 Billion as reported in 2022 with 128 Million users in the same year.

Binance holds most of the crypto shares in exchanges as well most of which consists of Bitcoin and Ethereum. Its most recent “proof of reserves” report, an unclear but voluntary attestation of an exchange’s holdings, reveals that the exchange alone possesses $65 billion in crypto assets. According to DefiLlama, it is worth $68.4 billion.

If it has to be with Zhao only, then the amount is staggering compared to Changpeng’s net worth. As per reports, CZ’s net worth resides at $10 billion which also took him to the Forbes list of “Richest Persons in Cryptocurrency”.

In a nutshell, Binance has a strong user holder with millions of users still registering. The exchange firm has named Richard Teng, a Singaporean businessman and former regulator, as its new CEO.

Also Read: Binance’s $4.3 Billion Settlement Fuels Predictions Of Bitcoin ETF Surge