Binance CEO Changpeng Zhao Quits, Pleads Guilty, and Must Pay $200 Million in Fines

Binance and its chief executive Changpeng Zhao pleaded guilty to criminal charges for anti-money laundering and violations of US sanctions under a sweeping deal with the US Department of Justice. The deal, which will allow the company to continue to operate, will also see Zhao step down as CEO. Binance will pay a $4.3 billion fine.

As well as leaving his role as CEO, Zhao will also pay $200 million in fines as part of the settlement. He appeared earlier today in court in Seattle to plead guilty and faces a maximum sentence of 10 years in prison.

In court documents, Binance was charged with money laundering violations, US sanctions violations, and conspiracy to conduct an unlicensed money transmitting business. Binance admitted that it had failed to prevent and report suspicious transactions made by terrorist organizations, including Hamas’ Al-Qassam Brigades, the Islamic State, and Al Qaeda.

“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,” said US attorney general Merrick Garland.

The court filing states that Binance allowed transactions worth more than $890 million involving customers in Iran, a country against which the US has imposed strict financial sanctions. Binance also allowed transactions between US users and counterparts in other sanctioned jurisdictions, including Cuba, Syria and illegally occupied regions of Ukraine, the indictment says.

“Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform,” said US Treasury secretary Janet Yellen. “Today’s historic penalties and monitorship to ensure compliance with U.S. law and regulations mark a milestone for the virtual currency industry.”

Zhao also “prioritized Binance’s growth and profits over compliance with US law,” the indictment alleges. He acknowledged the company operated in what he described “grey zone,” but instructed staff that it was “better to ask for forgiveness than permission,” the indictment states.

Richard Teng, currently head of regional markets at Binance, will take over as CEO. Teng was the CEO of Abu Dhabi Global Market, a financial regulator in the UAE. Teng is said to be a popular choice among Binance staff, according to sources.

“Binance is no longer a baby. It is time for me to let it walk and run. I know Binance will continue to grow and excel with the deep bench it has,” Zhao said in a post on X announcing Teng’s appointment as CEO.

In the last year, Zhao had taken to responding to negative headlines on X, formerly Twitter, by posting “4”—a symbol he adopted to dismiss allegations made against the company as baseless FUD (shorthand for fear, uncertainty and doubt). But the DOJ investigation into Binance was an open secret in crypto circles, and Binance insiders say that staff have been anxiously waiting for charges to drop, amid a “general sense of doom.”

Binance is by far the largest cryptocurrency exchange in the world by transaction volume, with around 40 percent of global market share, and is a major part of the infrastructure underpinning the crypto business.

The company also faces two civil lawsuits in the US, brought by the Commodities and Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC), alleging, among other things, commingling of customer assets, anti-money-laundering violations, and artificially inflating trading volumes.

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