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Who is Changpeng Zhao, the CEO of Binance ousted for crimes in the United States?

Who is Changpeng Zhao, the CEO of Binance ousted for crimes in the United States?

LONDON, Nov 21 (Reuters) – The most powerful man in crypto has lost his crown and could see his freedom restricted too.

Binance chief Changpeng Zhao resigned on Tuesday and pleaded guilty to violating US anti-money laundering laws as part of a $4.3 billion settlement that resolves a years-long investigation into the world’s largest cryptocurrency exchange. prosecutors said.

The settlement with the Department of Justice, part of a large agreement between Binance and other US agencies, resolves criminal charges of conducting an unlicensed money transfer business, conspiracy and violating sanctions regulations.

It also leaves Zhao’s future uncertain.

“Today I stepped down as CEO of Binance,” Zhao tweeted. “It’s true that it wasn’t easy to let go emotionally. But I know it’s the right thing to do. I made mistakes and I have to take responsibility.”

Zhao, known as CZ, will personally pay $50 million and will not be able to participate in Binance.

U.S. sentencing guidelines call for a prison sentence of 10 to 18 months for the charges he faces. Prosecutors are seeking an 18-month prison sentence, the New York Times reported.

Zhao and his lawyers did not return calls seeking comment.


After launching Binance in Shanghai in 2017, Zhao dreamed big. “We want to take over the entire market!” he told staff in a company chat group that year.

The 46-year-old CEO did not waver in his faith while building his crypto exchange. Even this year, Zhao felt that there was an important goal within his reach.

“The idea that a five-year-old startup could mature and operate at the same level as a financial institution that has been around for 200 years was impossible to fathom,” Zhao wrote in a January review of the previous year. . “But today we’re almost there.”

In that review, Binance praised its progress in complying with regulations around the world. The exchange had worked all year to strengthen customer controls, she said, developing the “best-in-class security and compliance team” in cryptocurrencies.

Zhao’s public goal of being a part of everything has been thwarted by Tuesday’s guilty plea and agreement.

“By failing to comply with US law, Binance made it easier for criminals to move their stolen funds and illicit profits on its exchanges,” US Attorney General Merrick Garland said on Tuesday. “Binance also did more than simply not comply with federal law. It pretended to comply.”


Zhao was born in China before moving to Canada in 1989 at age 12, two months after China’s Tiananmen Square crackdown on pro-democracy protesters, he wrote in a blog last year.

The tycoon traveled the world in his quest for success, working in Tokyo and New York before moving to Shanghai, where he embraced cryptocurrencies and founded Binance.

Its expansion was spectacular. Binance became the world’s largest crypto exchange in six months.

While its market share has declined this year, it still accounts for about half of global cryptocurrency trading volumes, according to research firm CCData.

From the company’s early days, Zhao maintained tight control over Binance, as a powerful leader committed to secrecy and focused on market dominance, a Reuters report from last year found. As CEO, he kept control of minute operational details while posting selfies on social media with world leaders and city mayors.

Zhao installed a small circle of associates in top positions, many of whom had worked or studied in China. Co-founder Yi He now heads Binance’s venture capital division as well as other key departments.

As Binance hired more people from the traditional financial and regulatory world, Zhao’s tight control over his company did not diminish. The company, which calls itself an “ecosystem,” has created more than 70 entities, most controlled personally by Zhao.

“Zhao is answerable to no one but himself,” the Commodity Futures Trading Commission wrote in March after suing Binance for operating what it called a “sham” compliance program.

It is unclear whether Zhao will relinquish control of the companies now. Meanwhile, one of his appointees will take over the management of Binance.

Richard Teng, a senior Binance executive who joined in 2021, is the new CEO, Zhao posted on social media on Tuesday. Teng will “ensure Binance delivers on our next phase of security, transparency, compliance and growth,” he said.

Reporting by Tom Wilson in London; Editing by Lisa Shumaker and Bill Berkrot

Our standards: the Thomson Reuters Trust Principles.

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Tom covers crypto companies, regulation and markets from London, focusing through 2022 on crypto exchange Binance. He has worked at Reuters since 2014, with a previous posting to Tokyo, where he uncovered abuses in Japan’s immigration system and won a joint Overseas Press Club award for reporting on tobacco giant Philip Morris.



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