By: 22 November 2023
Binance founder admits to violating money laundering rules

Changpeng Zhao, the founder and chief executive officer of Binance, has resigned following his guilty plea to money laundering violations. Binance is currently the world’s largest cryptocurrency exchange. 

Binance itself also pleaded guilty and agreed to pay $4.3bn to resolve the investigation into the violations. The US Justice Department charged the company with violating the Bank Secrecy Act, the International Emergency Economic Powers Act, and failure to register as a money transmitting business.  

In a post on X, Zhao said: “It was not easy to let go emotionally. But I know it is the right thing to do. I made mistakes, and I must take responsibility. This is best for our community, for Binance and for myself.” 

Launched in 2017, Binance quickly became the largest cryptocurrency exchange in the world. It generated $1.6bn in profit between August 2017 and October 2022.  

During a press conference, Merrick B. Garland, the US attorney general, said: “Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed. Now it is paying one of the largest corporate penalties in US history.” 

Garland continued: “The message here should be clear: using new technology to break the law does not make you a disruptor, it makes you a criminal.” 

Secretary of the Treasury, Janet L. Yellen, added: “Binance turned a blind eye to its legal obligations in the pursuit of profit. Its wilful failures allowed money to flow to terrorists, cybercriminals and child abusers through its platform.”  

With Zhao’s departure, former head of regional markets Richard Teng has been named as the new chief executive officer of Binance. In a post on X, Teng said: “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.” 

Prior to joining Binance, Teng was chief executive officer of the Financial Services Regulatory Authority at Abu Dhabi Global Market, chief regulatory officer of the Singapore Exchange, and director of corporate finance at the Monetary Authority of Singapore. 

The crypto industry is undergoing significant scrutiny. Earlier this month, Sam Bankman-Fried, founder of FTX, which was the world’s second-largest crypto exchange, was found guilty of fraud and faces decades in prison.  

Image: Canva  

Josh Poyser
Josh Poyser is an editor at FinTech Intel. He has written about fintech for several years and appeared at FinTech Connect 2023 on the 'Unlocking Success: The Art of Fintech PR' panel.