Binance CEO Changpeng “CZ” Zhao has agreed to step down from his role at the world’s biggest crypto exchange by trading volume and plead guilty to violating criminal U.S. anti-money laundering requirements as part of a settlement with the U.S. Department of Justice.
The token associated with CZ’s Binance plunged over 7% in the immediate aftermath of the report.
CZ To Quit As Binance CEO
Binance CEO plans to plead guilty and pay a sizable fine to settle charges from the U.S. Department of Justice.
According to a report from the Wall Street Journal, Zhao is expected to appear in a federal court in Seattle on Tuesday, where he will enter his guilty plea. Binance, the global trading platform that CZ established and owns, will pay a $4.3 billion fine that will also resolve the firm’s issues with the Commodity Futures Trading Commission (CFTC).
The settlement deal ends lengthy US investigations into Binance by the DOJ over issues like sanctions violations and enabling barred individuals to trade on the platform. The Wall Street Journal, however, noted that this plea bargain won’t impact the ongoing lawsuit with the U.S. Securities and Exchange Commission, as it does not include a settlement for the complaint it lodged against Binance this year for alleged investor-protection violations. But, it will preserve the exchange’s ability to continue operating.
Notably, Zhao will reportedly be allowed to keep his majority stake in Binance, suggesting he presumably won’t face prison time as part of the settlement. Nonetheless, the agreement prevents him from holding an executive role at the company going forward.
The outcome strikingly resembles a previous case against the executives of BitMEX, another digital asset exchange accused of violating U.S. anti-money laundering requirements. BitMEX’s former CEO, Arthur Hayes, pleaded guilty and was handed two years’ probation.
BNB Token Plummets On Binance-DOJ Settlement
The price of Binance’s native token, BNB plunged on Tuesday on the news of Zhao’s possible departure.
BNB has dipped 7.2% on the day after posting earlier gains and currently changes hands for $238 at publication time, per data from CoinGecko. Bitcoin is down 2% over the past 24 hours, while Ethereum trades 3.7% lower than it was yesterday.
The Department of Justice is expected to announce the settlement in a press conference at 3:00 pm ET.