Binance founder and CEO Changpeng Zhao pleads guilty to felony charges Tuesday related to his failure to prevent money laundering on the crypto exchange platform.
King 5 News Seattle
Former Binance CEO Changpeng Zhao on Tuesday named a new CEO of the cryptocurrency exchange he founded, after pleading guilty to federal money laundering charges and stepping down as the company’s chief.
Zhao named Richard Teng, a former CEO of Abu Dhabi Global Market, the UAE capital’s financial services regulator, as Binance’s new CEO. Teng was most recently global head of regional markets at Binance. He was also previously director of corporate finance at the Monetary Authority of Singapore.
In a post on X, Zhao said he “must take responsibility,” and that it was “not easy to let go emotionally.” The controversial crypto entrepreneur, who was accused of violating the U.S. Bank Secrecy Act and sanctions violations, added that he was “proud to point out” U.S. agencies did not allege Binance had misappropriated user funds or market manipulation.
The case against Binance, which was unsealed on Tuesday afternoon, shows that the exchange faces three criminal charges, including conducting an unlicensed money-transmitting business, violating the International Emergency Economic Powers Act, as well as a conspiracy charge. The exchange has agreed to $4.3 billion in fines and forfeiture.
The former Binance chief will personally plead guilty to violating and causing a financial institution to violate the Bank Secrecy Act, according to the plea agreement. The DOJ is also recommending that the court impose a $50 million fine on Zhao.
The settlement comes just after FTX founder Sam Bankman-Fried was found guilty of several criminal counts of fraud and conspiracy following just three hours of deliberation by the jury. For a high-profile monthlong trial that involved nearly 20 witnesses and hundreds of exhibits, experts told CNBC they’d never seen such a speedy decision.
“I can’t see myself being a CEO driving a startup again. I am content being an one-shot (lucky) entrepreneur,” Zhao said. “Should there be listeners, I may be open to being a coach/mentor to a small number of upcoming entrepreneurs, privately. If for nothing else, I can at least tell them what not to do.”
Zhao described Teng as a “highly qualified leader” and added that “with over three decades of financial services and regulatory experience, he will navigate the company through its next period of growth.”
“With CZ, and our leadership team’s support, I have accepted this role so that we can continue to meet and exceed the expectations of stakeholders while achieving our core mission, the freedom of money,” Teng said in a post on X Tuesday afternoon. Teng added that his focus will be on three key areas: including “reassuring users that they can remain confident in the financial strength, security and safety of the company;” “collaborating with regulators to uphold high standards globally that foster innovation while providing important consumer protections;” and “working with partners to drive growth and adoption of Web3.”
“He will ensure Binance delivers on our next phase of security, transparency, compliance, and growth,” Zhao added.
The remarks mark the first public comments made by Zhao after he agreed to a plea deal with the U.S. Department of Justice earlier Tuesday.
Zhao appeared before Judge Brian Tsuchida for a hearing in a Seattle courtroom at 10:00 a.m. Pacific Time (1:00 p.m. ET).