Changpeng Zhao, CEO of Binance and cryptocurrency guru, resigns: he will pay $4.3 billion in fines
A market as opaque and poorly regulated as that of cryptocurrencies is open to all types of abuse. And those who have the most access to that market are the ones who most easily abuse it. After the FTX scandal, it is Binance’s turn: its CEO and founder, Changpeng Zhao, leaves his position and his company will pay a fine of $4.3 billion for violating anti-money laundering laws.
As reported The VergeChangpeng Zhao has reached an agreement with the Seattle judicial authorities to avoid going to jail.
According to this agreement, Changpeng Zhao pleads guilty to violating anti-money laundering laws. He must resign from his position as CEO of Binance, pay $50 million personally, and $4.3 billion through his company. He will also be prohibited from any relationship with Binance for the next three years.
However, Changpeng Zhao will continue to retain his majority shares in the company. It can be said that he has come out very, very well with the agreement. The fine is just pocket change for the money that Binance handles.
Binance, money laundering… and Iran
As Attorney General Merrick Garland explained, “Binance facilitated billions of dollars of unregulated cryptocurrency transactions. Its platform accommodates criminals around the world who use Binance to move their stolen funds and other criminal proceeds.”
And he continues: “Nearly $900 million in transactions between the United States and Iran, a sanctioned country, while his team was aware that its anti-money laundering protections were inadequate.”
One of the criticisms of cryptocurrencies is that Their opacity means that they are used to launder money, without the companies that process cryptocurrency exchanges taking sufficient measures to prevent it.. And this research seems to prove it.
Binance has not laundered money, but its measures to prevent this practice through its cryptocurrency exchange service were insufficient, and they knew they were useless, but did nothing about it.
Changpeng Zhao has confirmed his resignation, and although he recognizes that “he has made mistakes”, he boasts of not having appropriated funds, and of not manipulating the market. About money laundering through Binance, not a word:
The legal agreement is a serious blow to Binance, and cryptocurrencieswhich sees the leading exchange house plead guilty to violating laws associated with money laundering, looking the other way knowing it could be happening.
Meanwhile, the other major crypto exchange, FTX, filed for bankruptcy due to poor economic practices, including using its clients’ funds for its own benefit.
Sam Bankman-Fried, its CEO and founder, has been found guilty of fraud, and faces a sentence of up to 110 years in prison. The sentence will be known on March 24.
These are very hard blows to the credibility of the crypto market, although the prices have not fallen much today, after knowing the resignation of the CEO of Binance, and the fine of 4.3 billion dollars.
