Binance founder Changpeng Zhao Steps Down from CEO Post, Facing 18-month Prison In Historic $4.3 Bn Settlement
Concerns over cryptocurrencies flagged by some of the regulators including the Reserve Bank of India (RBI) have become a reality with Changpeng Zhao, the founder and CEO of Binance, the world”s largest crypto exchange, being found guilty of failing to report over 100,000 suspicious transactions involving organizations categorized by the US as terrorist groups, such as Hamas, al Qaeda, and the Islamic State of Iraq and Syria. He was forced to resign from his position.
Changpeng Zhao is ordered to pay a $4.3 billion settlement, one of the largest corporate penalties in US history. He was also ordered to pay a personal fine of $50 million to resolve the issue. The actions taken against Zhao are with respect to non-compliance of US anti-money laundering and sanctions laws.
The Reserve Bank of India (RBI) was highly critical of cryptocurrencies, saying that they lacked inherent value unlike banknotes. Moreover, cryptocurrencies could be misused by terrorist organizations and anti-national groups because they lack a centralized regulatory system. Cryptocurrencies are virtual currencies, and their ownership is stored on decentralized blockchains, which are distributed ledgers.
The repercussion of the settlement is a double whammy to the cryptocurrency industry, as it already facing increased scrutiny across the world.
Who is Changpeng Zhao?
A Chinese Canadian business executive and the founder of Binance,Changpeng Zhao, largely known as CZ, is considered to be the most influential person in the crypto world. Embarking on a career in Finance with Bloomberg Tradebook, Fusion Systems, and others, he started off his crypto world journey in 2013 working with different blockchain projects.
In 2017, Changpeng Zhao founded Binance cryptocurrency exchange, which became an instant hit for its easy-to-use features, trading options on a large number of cryptocurrencies, and nominal fees. With all these specialties, Binance has become the game changer in the crypto world. Moreover, Binance successfully launched their own crypto Binance Coin which is currently playing a pivotal role in the crypto market.
“Binance made it easy for criminals to move their stolen funds and illicit proceeds on its exchanges,” U.S. Attorney General Merrick Garland said on Tuesday. “Binance also did more than just fail to comply with federal law. It pretended to comply.
What is Next for Chanpeng Zhao?
According to the New York Times, The Justice Department is looking for an 18-month prosecution for Zhao. Reuters reports that despite being enormous, the fine is estimated to be manageable for Zhao, given that his net worth amounts to $10.2 billion, according to Forbes.”
“He still has enormous wealth,” said Robert Frenchman of Mukasey Frenchman LLP. “He isn”t likely to spend too much time in a U.S. jail. He retains his ownership stake in Binance, a company that has now resolved some of its biggest legal issues.
