Changpeng Zhao steps down as Binance CEO as part of a settlement with the US DOJ

What’s new? Binance settled the claims of the US Department of Justice (DOJ), agreeing to pay $4,3 billion in fines. In addition, Binance founder and CEO Changpeng Zhao pleaded guilty to violating securities laws, which DOJ officials said facilitated money laundering on the exchange. The businessman paid a bail of $175 million, and the announcement of the verdict is scheduled for February 23 next year. Along with this, Zhao left the post of CEO of the global platform.

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What else is known? $4,3 billion will go to pay the fines imposed by several federal agencies. Attorney General Merrick Garland responded that this is one of the largest fines for a legal entity in a criminal case in US history.

As part of the agreement, Binance will exit the US market completely and allow a group of third-party US monitors to oversee its operations for the next five years. Because Zhao pleaded guilty under the agreement, he waived his right to appeal any sentence within 18 months.

In addition to the DOJ, the exchange settled claims by two of its divisions, the Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Asset Control (OFAC), as well as the Commodity Futures Trading Commission (CFTC).

Zhao himself is allowed to reside in the UAE pending sentencing but must return to the States two weeks before the hearing.

Zhao will be replaced as CEO by Richard Tan, formerly in charge of the exchange’s regional markets outside the United States.

Amid the news, users withdrew $1,01 billion from Binance per day, and the rate of the exchange token BNB fell by 10% to $234,4.

Matrixport analyst Markus Thielen believes that this outcome will allow Binance to maintain its leading position in the market for the next two to three years. In addition, other exchanges, following Binance, will strengthen their compliance controls, which may accelerate the approval of spot bitcoin exchange-traded funds (ETFs) in the United States. The co-founder of F2Pool under the nickname @bitfish1 has a similar opinion on ETFs.

Conor Grogan, the senior executive of the US crypto exchange Coinbase, analyzed data on Binance’s reserves and savings and concluded that it would be able to pay the fine without having to sell any cryptocurrencies. Coinbase CEO Brian Armstrong believes that the case against Binance will be a catalyst for creating a clear regulatory framework for the operation of crypto companies in the United States.