Another one bites the dust_ Binance CEO quits as both he and the company plead guilty to money laund

Binance is the largest cryptocurrency exchange in the world, and has been under investigation by US authorities for years over allegations of offshore money laundering. Now it has announced that CEO and founder Changpeng Zao is to step down from his role and plead guilty to violating US money-laundering regulations (via BBC), alongside Binance itself pleading guilty and reaching a settlement with regulators that will come to an eye-watering rummy new app $4.3 billion.

"Binance enabled nearly $900 million in transactions between US and Iranian users, and facilitated millions of dollars in transactions between US users and users in Syria, and in the Russian occupied Ukrainian regions of Crimea, Donetsk and Luhansk," said a spokesperson for the US Justice Department.

Zhao will enter the plea this afternoon in Seattle federal court, and alongside Binance's plea this will settle the allegations made by regulators. It's impossible not to see this in the context of the rummy nobel recently ended trial of Sam Bankman-Fried, the former FTX CEO who was found guilty of fraud following the firm's collapse and now faces decades in prison.

There was definitely a sense that prosecutors wanted to make an example of Bankman-Fried, who had been a poster boy for the crypto industry, and it feels like no coincidence that shortly after this verdict Binance decided to play ball. Ironically enough, Binance's valuation has only grown since the collapse of FTX, which was one of its largest competitors, but the ongoing investigations have seen various executives leave.

"Today, I stepped down as CEO of Binance," said Zhao. "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 [...] Binance is no longer a baby. It is time for me to let it walk and run."

Zhao announced Richard Teng as the new Binance CEO, and said he intends to take a break. He also pointed out that the resolutions reached with US agencies "do not allege that Binance misappropriated any user funds, and do not allege that Binance engaged in any market manipulation." I mean, yeah, it was about money laundering.

The fine comes from a lawsuit filed rummy royal by the Commodity Futures Trading Commission (CFTC), which claimed Binance had no process in place to prevent and detect terrorist financing and money laundering. It also allowed US citizens to invest in financial products that can only be traded in the US on regulated platforms, which is a problem because Binance has never been registered with US regulators. The $4.3 billion relates to these claims, and others made by the US Treasury Department.

One remaining issue for Binance is the Securities and Exchange Commission (SEC), which sued Zhao and the company in June, alleging it of various violations of US investor protection laws. That's because Binance is going to fight that case, with the argument that cryptocurrencies aren't a variety of investment that is overseen by the SEC.

The deal will see Zhao retain majority ownership of Binance, though unable to have any leadership position at the company, and facing a possible prison sentence. In a similar case involving the crypto exchange BitMEX, which pleaded guilty to the same charges, that company's former CEO Arthur Hayes was sentenced to two years' probation.