Binance CEO CZ Steps Down As Part Of $4 Billion Settlement With DOJ

Innovation

Changpeng “CZ” Zhao is stepping down as CEO of Binance as part of a major US$4 billion settlement between the Department of Justice and the cryptocurrency exchange he founded, according to sources close to the discussions with the agency.
Founder and CEO of Binance Changpeng Zhao, commonly known as "CZ", attends the "CZ

Founder and CEO of Binance Changpeng Zhao, commonly known as “CZ”, attends the “CZ

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The settlement will be with the DOJ and Commodities Futures Trading Commission; the Securities and Exchange Commission is not participating.

As part of the settlement, Zhao will also plead guilty to anti-money laundering charges brought by the Department of Justice. He is scheduled to enter the plea in federal court in Seattle on Tuesday afternoon, the Wall Street Journal reported.

Binance, the DOJ, CFTC, and SEC had not replied to requests for comment at the time of publication.

The SEC charged Binance, and its founder CZ, in June with operating an unregistered exchange and misleading investors by using a Switzerland-based fund Sigma Chain, which was also owned by CZ, to inflate the trading volume on Binance’s U.S. platform. “Through thirteen charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law,” SEC chair Gary Gensler said in June.

The SEC action followed charges brought by the CFTC, which also alleged the company offered crypto derivatives, such as futures or options contracts, to U.S. citizens without registering as a futures commodity merchant.

Bloomberg reported Monday that Binance was set to agree to a $4 billion settlement with the Justice Department. The deal would mark the end of a Justice Department investigation into the crypto exchange that began at least in 2018. Reuters reported that federal prosecutors had asked Binance to hand over files and messages relating to its U.S. customers in late 2020.

Last September, Binance announced the formation of a Global Advisory Board led by former US Senator and Ambassador to China Max Baucus. Other members include David Plouffe, former campaign manager for President Barack Obama, and Bruno Bézard, former head of the French Treasury.

This story was first published on forbes.com. More to come.

Additional reporting by Steve Ehrlich, Sarah Emerson and Iain Martin.

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