Changpeng Zhao, also known as CZ, the co-founder and CEO of Binance, has decided to leave his position at the exchange on the following day. The US Department of Justice (DOJ) is about to say that it has reached a $4.3 billion deal with Binance, the biggest cryptocurrency exchange in the world.
Changpeng Zhao plans to enter a guilty plea to multiple charges brought by the DOJ, according to Reuters. He is due in a federal court in Seattle the following day, where he will enter his plea. He is also said to plead guilty to “one criminal charge.”
In exchange for the deal, he will keep his majority stake in the cryptocurrency exchange, but he will not be able to run the business.
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More info on Changpeng Zhao’s resignation
As part of an extensive settlement with the US Department of Justice, Chaopeng Zhao will enter a guilty plea to criminal charges relating to breaking US anti-money-laundering laws.
Multiple news outlets say that the plea deal with federal prosecutors, which includes a $4.3 billion fine for Binance, would make it possible for the cryptocurrency exchange to keep going without its charismatic founder in charge.
Attorney General Merrick Garland will likely discuss the deal with the U.S. Department of Justice and other U.S. regulators at a press meeting in Washington, DC, at 3 p.m. ET.
Binance faces legal problems
A multi-year investigation into the cryptocurrency exchange would end with the anticipated agreement with the US Department of Justice.
It was in March that the Commodity Futures Trading Commission (CFTC) sued the crypto exchange and Zhao, saying they did a lot to do business with US users without following the rules of that country. The lawsuit listed many alleged crimes in the early days of cryptocurrencies when there were no rules. This contrasted Binance’s claim that it was following the rules.
The suit said that the company had made several ways for US customers to do business on their exchange, but they didn’t do much to follow US financial rules.
After that, in June, the Securities and Exchange Commission sued Binance, saying that a separate US trading operation the exchange set up only for American customers and in line with US laws was all a fake so that US customers could still trade on the overseas exchanges with less strict rules.
The lawsuit said that the company was trying to escape all kinds of scrutiny from the government. The damage to Binance was significant, as many leaders quit the exchange.
What will happen next?
According to Forbes, Binance is considering putting out a formal statement about this change. Longtime executive Richard Teng is being considered to take over from CZ.
Teng is now in charge of the company’s areas outside of the United States. and used to be in charge of the business’s operations in Asia and Europe. Forbes reported that people familiar with the talks said Teng is the most likely choice. However, talks are still going on, so things could change.
Forbes says the company is also getting ready to name the members of a new board that will run the business. As part of the deal, it will also have to work with a third-party monitor based in the US, according to people familiar with the case.
Since this is a work in progress, more details will be included as they become available.