Changpeng Zhao, commonly known as “CZ,” is reported to be stepping down as CEO of Binance as part of a $4 billion settlement with the Department of Justice (DOJ) and Commodities Futures Trading Commission (CFTC). This settlement comes after Binance and its founder, Zhao, were charged with operating an unregistered exchange and misleading investors by using a Switzerland-based fund to inflate trading volume on Binance’s U.S. platform. As part of the settlement, Zhao will also plead guilty to anti-money laundering charges brought by the Department of Justice and is scheduled to enter the plea in federal court in Seattle. Binance, the DOJ, CFTC, and SEC have not commented on the situation. Federal prosecutors had previously requested files and messages relating to Binance’s U.S. customers in late 2020, and the company had faced significant legal scrutiny due to allegations of operating without proper registration and engaging in extensive deception and evasion of the law.
The settlement will be with the DOJ and Commodities Futures Trading Commission, with the Securities and Exchange Commission not participating. The SEC action followed charges brought by the CFTC, which also alleged the company offered crypto derivatives to U.S. citizens without registering as a futures commodity merchant. Binance was reported to be set to agree to a $4 billion settlement with the Justice Department, marking the end of a Justice Department investigation that began at least in 2018. This news comes after Binance announced the formation of a Global Advisory Board led by former US Senator and Ambassador to China Max Baucus, indicating that the company is taking steps to address legal and regulatory issues. As developments unfold, additional reporting on this situation continues to surface as it unfolds.
