Binance Founder Changpeng Zhao Agrees to Step Down, Plead Guilty

By Dave Michaels, Patricia Kowsmann and Vivian Salama. (The Wall Street Journal). November 21, 2023.

The chief executive of Binance, the largest global cryptocurrency exchange, plans to step down and plead guilty to violating criminal U.S. anti-money-laundering requirements, in a deal that may preserve the company’s ability to continue operating, according to people familiar with the matter. 

Changpeng Zhao is scheduled to appear in Seattle federal court Tuesday afternoon and enter his plea, the people said. Binance, which Zhao owns, will also plead guilty to a criminal charge and agree to pay fines totaling $4.3 billion, which includes amounts to settle civil allegations made by regulators, the people said.

The deal would allow Zhao to retain his majority ownership of Binance, although he won’t be able to have an executive role at the company. He would face sentencing at a later date.

The outcome resembles an earlier case that prosecutors brought against the executives of BitMEX, an exchange for trading crypto derivatives that was based in the Seychelles. Its former CEO, Arthur Hayes, pleaded guilty to violating anti-money-laundering law and was later sentenced to two years probation, avoiding a possible prison term of six to 12 months. 

Read the full story here: The Wall Street Journal.

SEC Sues Crypto Exchange Binance, CEO Changpeng Zhao

By Nikhilesh De. June 5, 2023. (CoinDesk).

The U.S. Securities and Exchange Commission sued crypto exchange Binance, the operating company for Binance.US and Binance founder and CEO Changpeng “CZ” Zhao on allegations of violating federal securities laws on Monday.

Binance, Binance.US and CZ offered unregistered securities to the general public in the form of the BNB token and Binance-linked BUSD stablecoin, said the suit, which also alleges that Binance’s staking service violated securities law. There are similar charges against BAM Trading – the operating company for Binance.US – and Binance itself, including failure to register as a clearing agency, failure to register as a broker and failure to register as an exchange. The SEC also alleged that Binance allowed for commingling of customer funds, that CZ was “secretly” controlling Binance.US and that a CZ-owned and operated entity was inflating Binance.US’sding volume.

The suit also alleged multiple times that Binance allowed U.S. persons (meaning U.S. citizens or people living in the U.S.) to trade on its platform, despite saying it wasn’t.

Read the Full Article Here.

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