Binance Founder CZ Steps Down in $4 Billion Settlement with Department of Justice

In a significant development, Changpeng “CZ” Zhao, the CEO of Binance, is reportedly resigning as part of a substantial $4 billion settlement agreement with the Department of Justice (DOJ) and the Commodities Futures Trading Commission (CFTC). Sources close to the discussions revealed that the settlement, excluding the Securities and Exchange Commission (SEC), involves Zhao pleading guilty to anti-money laundering charges brought by the DOJ.

Scheduled to enter the plea in a federal court in Seattle on Tuesday, Zhao’s resignation is a pivotal aspect of the settlement, which addresses allegations of operating an unregistered exchange and misleading investors. The SEC had previously charged Binance and CZ in June for engaging in deceptive practices, conflicts of interest, lack of disclosure, and evading the law. Gary Gensler, the SEC chair, emphasized the extensive nature of these charges.

The CFTC also filed charges, asserting that Binance offered crypto derivatives to U.S. citizens without registering as a futures commodity merchant. Bloomberg reported on Monday that Binance was on the verge of finalizing a $4 billion settlement with the DOJ, signaling the conclusion of a protracted investigation initiated in 2018.

While Binance, the DOJ, CFTC, and SEC have yet to respond to requests for comment, reports suggest that the settlement will bring closure to a comprehensive probe into the crypto exchange’s activities. In September of the previous year, Binance had taken steps to bolster its governance by establishing a Global Advisory Board, led by former U.S. Senator and Ambassador to China Max Baucus. Noteworthy members include David Plouffe, former campaign manager for President Barack Obama, and Bruno Bézard, former head of the French Treasury.