CZ Resigns from Binance: Official Announcement
In a statement released on the evening of November 21, CZ expressed, “Today, I am stepping down as the CEO of Binance. Acknowledging this decision was not easy, but it is the right thing to do. I have made mistakes, and I must take responsibility. It is the best course of action for the community, for Binance, and for myself.” CZ asserted that “Binance is no longer a child” and it is time for it to walk and run on its own.
Earlier on the same day, CZ appeared before a Seattle court and pleaded guilty to “failure to comply with anti-money laundering regulations.” Zhao’s lawyer stated that Binance’s head had traveled to the United States from the UAE, a jurisdiction without an extradition agreement with the U.S., demonstrating his commitment and sincerity.
The sentencing for CZ is scheduled for February 23, 2024, with a potential 18-month prison term. He emphasized that U.S. regulatory authorities will not accuse Binance of misappropriating user funds or engaging in market manipulation.
Binance, the world’s largest cryptocurrency exchange, also plans to plead guilty to criminal charges and agrees to pay a total fine of $4.3 billion, including the amount to settle civil allegations brought by regulatory authorities. The settlement will conclude the prolonged investigations into Binance. In a newly released press statement, the company acknowledged, “At its inception, Binance lacked appropriate compliance measures.”
CZ additionally announced the appointment of Richard Teng, former Global Head of Markets at Binance, as the new CEO. According to CZ, Richard is a highly qualified leader with over three decades of experience in financial services and management.
Richard will ensure that Binance progresses in the next phase with a focus on security, transparency, compliance, and growth.
According to sources from the Wall Street Journal, the CEO transition agreement allows CZ to retain a significant ownership stake in the company, despite stepping down from the operational role. This outcome parallels the previous case of BitMEX’s CEO, where former CEO Arthur Hayes pleaded guilty to violating anti-money laundering laws and subsequently received a two-year probation.
“What’s next for me? I will take a break first. I haven’t had a true day off (phone turned off) in six and a half years,” CZ revealed, adding that he envisions himself not becoming the operational CEO of any startup in the future. However, he plans to make investments and become a shareholder in select startups in the Web3, blockchain, DeFi, AI, and biotech sectors. He is also open to advising a few entrepreneurs.
Summary of CZ’s Biography
Born in 1977 in Canada with Chinese roots, billionaire Changpeng Zhao graduated in information technology from McGill University. He worked at the Tokyo Stock Exchange before transitioning to Bloomberg LP, the financial subsidiary of Bloomberg. During this time, CZ realized the significance of “how money flows through computer systems and never took his eyes off the financial sector.”
Before founding Binance in July 2017, CZ was part of the development team at Blockchain.info and served as the Chief Technology Officer of OKCoin, the world’s second-largest cryptocurrency exchange at the time. During Binance’s initial coin offering (ICO), CZ raised $15 million.
Under CZ’s leadership, Binance evolved into the world’s largest cryptocurrency ecosystem. Following the downfall of FTX last year, the exchange continued to increase its market share and influence. In 2021, Changpeng Zhao joined the billionaire club with an estimated wealth of $96 billion, according to Bloomberg’s rankings.
In recent months, Binance has faced a continuous onslaught of challenges. Following investigations by regulatory authorities across Europe, high-ranking executives began departing from the company early this year. In mid-March, Binance, along with its CEO, came under scrutiny from the U.S. Commodity Futures Trading Commission (CFTC) for alleged violations of eight provisions in the U.S. Commodity Exchange Act.
These included regulations requiring measures to “prevent and detect money laundering and terrorist financing activities.” According to Bloomberg, this marked the most significant legal action taken by U.S. regulatory authorities against Binance to date. While CNBC speculated that this could disrupt Binance’s operations, it is seen as only the initial step in a series of regulatory actions against the world’s largest cryptocurrency exchange.
