Binance, the largest cryptocurrency exchange in the world, announced on Nov. 21 that it has reached a settlement with the U.S. Department of Justice (DOJ), the Commodity Futures Trading Commission (CFTC), the Office of Foreign Assets Control (OFAC), and the Financial Crimes Enforcement Network (FinCEN). As part of the resolution, CEO Changpeng Zhao (CZ) will step down from his role after acknowledging that he "made mistakes" in the company’s early days. The settlements come as Binance seeks to move past historical compliance violations.
Binance announced in a blog post that as part of the resolution, CZ will be replaced as CEO by Richard Teng, the company’s former Global Head of Regional Markets. The post said the settlements "acknowledge our company’s responsibility for historical, criminal compliance violations, and allow our company to turn the page on a challenging yet transformative chapter of learning and growth." Binance said that when it first launched, it did not have adequate compliance controls in place. "Today, Binance takes responsibility for this past chapter," the post said.
Binance emphasized that the DOJ is not alleging that Binance misused any customer funds or engaged in market manipulation. The post said that during the last two years, Binance has restructured its company, elevating leadership with compliance backgrounds to become "a stronger, safer platform for our users."
As part of the settlement, Binance will pay a $4.3 billion penalty and has agreed to allow a third-party monitor to have access to its transactions and accounts, according to a DOJ press release.
The settlement resolves the DOJ’s investigation into Binance as well as the charges the company faced from the CFTC, according to a CFTC press release.
Binance said CZ would remain majority shareholder and serve as a resource for consultation on historical business matters, according to the blog post. Binance said it is a "much stronger company today" as a result of its work with regulators around the world. "Learning from our own past, we are proud to usher in some of the most significant investments in compliance, security, and transparency of any company in our industry," the post said.
CZ said in a social media post on X, formerly Twitter, that stepping down as CEO is "the right thing to do." "I made mistakes, and I must take responsibility," CZ said. He said Teng is a "highly qualified leader" who will "ensure Binance delivers on our next phase of security, transparency, compliance, and growth."
Richard Teng too shared his perspective on accepting this new role through social media. "With CZ's support and that of our leadership team's support I have accepted this role so that we can continue to meet and exceed expectations while achieving our core mission - freedom of money," Teng wrote in post on X. He intends to focus on driving growth of Web3 while assuring users about Binance's security and collaboration with regulators for upholding high global standards that foster innovation and provide important consumer protections.
