Binance Founder to Step Down and Plead Guilty in $4.3 Billion Settlement

The founder and chief executive of Binance, the world’s largest cryptocurrency exchange, has agreed to step down from his role and plead guilty to charges of violating U.S. anti-money laundering laws, according to a report by The Wall Street Journal1.

Changpeng Zhao, also known as CZ, will admit wrongdoing and agree to pay $4.3 billion in fines and forfeitures to the U.S. Department of Justice and the Securities and Exchange Commission, the report said, citing people familiar with the matter.

The settlement, which is expected to be announced soon, would mark the end of a long-running investigation into Binance’s operations and compliance practices, which have been under scrutiny by regulators around the world.

Binance, which was founded in 2017 and has no official headquarters, has been accused of facilitating illicit transactions, such as money laundering, tax evasion, and sanctions evasion, by allowing users to trade cryptocurrencies anonymously and without verifying their identities.

The U.S. authorities have also alleged that Binance offered securities-like products, such as derivatives and tokens linked to stocks, without registering them with the SEC or complying with securities laws.

Binance has denied any wrongdoing and said it has cooperated with the investigation. The company has also taken steps to improve its compliance and governance, such as hiring former regulators and implementing stricter verification and monitoring measures.

The settlement would allow Binance to continue operating in the U.S., where it has a separate entity called Binance.US, which is licensed and regulated by state authorities. However, Zhao would have to relinquish control of both Binance and Binance.US, and appoint new leaders who would be approved by the U.S. regulators, the report said.

The settlement would also require Binance to disclose its ownership structure, financial records, and customer information to the U.S. authorities, and to implement a comprehensive compliance program that would be monitored by an independent auditor.

The settlement would be one of the largest ever imposed on a cryptocurrency company, and would signal a major shift in the industry, which has been largely unregulated and decentralized. It would also reflect the growing efforts by the U.S. and other governments to crack down on the risks and challenges posed by the rapidly growing crypto market, which has a total value of over $2.5 trillion.