Binance CEO to resign, pay $50m fine over money laundering violations

Changpeng Zhao, Binance’s chief executive officer (CEO) and founder, has pleaded guilty to money laundering, unlicensed money transmitting and violations in Seattle.

Binance also agreed to pay more than $4 billion in fines and other penalties, according to the federal authorities.

The pleas were made on Tuesday in federal court in the United States.

Under the agreement, the firm reached settlements with the treasury department and the Commodity Futures Trading Commission, which have also been investigating the company.

In exchange for admitting guilty, Zhao agreed to step down from his position and pay a $50 million fine. 

Prosecutors are also seeking an 18-month prison sentence for Zhao, which is the maximum penalty under federal guidelines, according to senior justice department officials.

Additionally, Binance has agreed to accept the appointment of a government monitor to oversee its business operations.

As part of the agreement, the billionaire is prohibited from any involvement with Binance for three years after the monitor is appointed.

Commenting on the event in a statement, Merrick Garland, the 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”.

Zhao and Binance is the second largest cryptocurrency exchange firm to be charged for money laundering.

Two weeks ago, Sam Bankman-Fried, former chief executive officer (CEO) of FTX,  was found guilty of fraud and money laundering at the end of a month-long trial in New York.