Binance CEO Changpeng Zhao, Who Crafted a Responsible Image, Is Pleading Guilty to Breaking Anti-Money Laundering Laws

Changpeng Zhao, Binance CEO and SBF’s Top Rival, To Step Down, Plead Guilty
Founder and CEO of Binance Changpeng Zhao, commonly known as “CZ”, attends the “CZ meets Italy” at Palazzo Brancaccio on May 10, 2022 in Rome, Italy. (Photo by Antonio Masiello/Getty Images)

Changpeng Zhao, the head of the world’s largest crypto exchange, has stepped down from his role as CEO of Binance and pled guilty to violating U.S. anti-money laundering laws, the Binance CEO said Tuesday, settling a years-long, multi-agency investigation into the firm. 

In a post on the site formerly known as Twitter, Zhao admitted that he had “made mistakes” during his tenure at the company.

“I must take responsibility. This is best for our community, for Binance, and for myself,” he wrote. Bloomberg reported on Tuesday afternoon that Zhao had arrived at a federal court in Seattle to finalize the deal.

As part of a settlement, Zhao’s firm will also plead guilty to a criminal charge, admit wrongdoing and pay fines in excess of $4 billion, The Wall Street Journal first reported Tuesday, citing people familiar with the matter. 

The settlement will reportedly allow Binance to continue operating, and Zhao will continue to own most of the company. Though he will no longer be able to serve as an executive, he will consult for it, he said.

In the same post, Zhao announced that the company’s head of regional markets, Richard Teng, would succeed him as CEO. In his own statement Tuesday, Teng wrote that his focus would be on “reassuring users” about the company’s future, as well as “collaborating with regulators.”

“The foundation on which Binance stands today is stronger than ever,” he wrote. “We are here to stay.”

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Zhao, who also goes by “CZ,” had become one of the most recognizable faces of the crypto industry, surpassed perhaps only by his chief rival, disgraced former FTX CEO Sam Bankman-Fried. He is based in the United Arab Emirates and has long served as a global spokesman for the industry, claiming to set new standards for regulatory compliance. In 2018, a Binance spokesperson said they hoped the firm could “inspire” the rest of the industry to better comply with regulations. 

The reality was different: In 2022, Reuters reported that Binance withheld information from regulators and kept weak anti-money laundering checks in place. 

In one 2019 message obtained by Reuters, Karen Leong—at the time Binance’s global money laundering reporting office—said that Zhao wanted “no kyc,” meaning know-your-customer checks that are designed to combat money laundering on financial platforms. “Reduce KYC. Raise Limits. BEST COMBO,” Leong said in the same message. At the time, Binance denied all wrongdoing. 

Multiple federal agencies are reportedly involved in Tuesday’s deal, including the Department of Justice, Commodity Futures Trading Commission, and Treasury Department. It stems in part from a wide range of charges, including that the crypto firm allowed Americans to trade with people in sanctioned companies like Iran and Russia. The firm has also been accused of bank fraud by the Justice Department.


Binance was founded in 2017 in China by Zhao, who is a Canadian citizen, and quickly became a global behemoth in the industry. The firm’s holding company is based in the Cayman Islands but has long claimed to have no official headquarters and has been highly secretive about where it operates. Binance is closed to U.S. investors, spurring the company to start Binance.US, which is headquartered in Florida. The CEO and chief risk officer of Binance.US departed the firm in September. 

While many in the crypto industry are likely looking at a settlement as a positive thing, even if it means criminal charges for Zhao, Binance’s troubles are likely far from over. The SEC is currently suing Binance for multiple charges including: operating unregistered exchanges, misrepresenting trading controls and oversight, and selling unregistered securities. 

The SEC alleges that Binance allowed certain high-value U.S. customers to trade on its global platform, which is supposed to exclude U.S. investors. Additionally, the regulator alleges that Zhao and Binance used customer funds at their discretion, including diverting billions of dollars of customer funds to entities owned by Zhao.

Commingling funds and secretly diverting them to entities controlled by the exchange owners closely mirrors the circumstances surrounding the downfall of Bankman-Fried’s FTX. Binance is fighting the lawsuit. 


On Tuesday, Zhao tried to find victories where he could, noting that the U.S. agencies—at least in this instance—had not alleged that Binance misappropriated user funds or engaged in market manipulation.

“Funds are SAFU!” he wrote, using a crypto term for safe. 

On Tuesday, Zhao said he will step away from startup life, take some time off, and then focus on passively investing in blockchain, AI, and biotech. He also left the door open to mentoring entrepreneurs “privately.” 

“If for nothing else, I can at least tell them what not to do,” he wrote. 

Spokespeople for Binance and the DOJ did not immediately respond to a request for comment.


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