Why did Zhao resign and what will be the future of Binance?
On the night of Tuesday, November 30, shocking news was published in the space of digital currencies; Changpeng Zhao, CEO of the world’s largest exchange, has resigned and Binance has agreed to pay a heavy fine of $4.3 billion to American agencies. But what is behind Zhao’s resignation and what will be the future of the most important organization active in the digital currency space of the world?
Last night’s story started with the publication of a report in the Wall Street Journal; Surprising news that the CEO of Binance has resigned after accepting charges related to the violation of anti-money laundering regulations in the United States, so that the company can continue its activities and not get involved in more legal challenges.
This news was confirmed by Zhao shortly after, and he published the following message twitterpersonally announced his separation from Binance:
Today I stepped down as CEO of Binance. Admittedly, this decision was not easy for me emotionally. But I know I’m doing the right thing. I have made mistakes and I have to take responsibility for them. This is the best decision for our community, for Binance and for myself.
According to the documents published from the Binance case, the world’s largest digital currency exchange is facing these three key charges: 1. Violation of money laundering laws in the United States 2. Unauthorized activity in the field of financial transfers and 3. Violation of US sanctions regulations.
Regarding the violation of sanctions regulations, Binance has also mentioned the provision of services to Iranian users. For example, the United States Department of Justice said that a total of $900 million in transactions between the United States and Iranian users were made on Binance, which is a clear violation of economic sanctions.
The heavy fine of 4.3 billion dollars of Binance by the US government is actually intended to resolve these charges and enables this complex to continue its activities despite committing a violation and the situation does not become more critical for it. Of course, most of Binance’s activities in the coming years will be supervised by American institutions.
According to the announcement of the US Department of Justice, in addition to paying a billion fine, Binance has agreed to completely withdraw from the US market and a supervisor for 5 years to settle charges related to the Financial Crimes Enforcement Network (supervisory body in the field of money laundering) and the Office of Foreign Assets Control. (OFAC – supervisory body in the field of economic sanctions in the United States), be appointed specifically for this exchange.
What will be the future of the world’s largest digital currency exchange?
As mentioned, Binance agreed to withdraw from the US market while paying a $4.3 billion fine ($3.4 billion to the Financial Crimes Enforcement Network and $968 million to the Office of Foreign Assets Control), but this led to a suspension. Binance’s activities are international and not outside the borders of the United States. Regarding the withdrawal of Binance from the US, it should be clarified that the withdrawal of Binance from the US market refers to the international part of this exchange or “Binance.com” and according to a senior official of the US Treasury Department, the US branch of this exchange means ” Binance.us, which is registered as a money services business in the United States under the name BAM Trading Services, is not included in these changes.
The U.S. Treasury Department will have access to Binance’s records and systems during its five-year monitoring period mentioned earlier to ensure that the exchange does not breach its obligations.
Apart from the Binance group, Changpeng Zhao, the former CEO of this exchange, is also facing separate charges. Like Binance, he has accepted the charges and agreed to fully cooperate with the US court down the road. Zhao is currently out on $175 million bail and has agreed to return to the United States 14 days before his sentencing on February 23, 2024, to disclose his whereabouts to the court and If he does not appear at the court session, a warrant for his arrest should be issued.
As the United States is expected to review Zhao’s bail, he will remain in Seattle until Monday, November 27. Zhao has lived in Dubai for several years, and while there is no extradition agreement between the United States and the United Arab Emirates, the two countries signed a bilateral agreement last year to strengthen judicial cooperation.
The former CEO of the world’s largest digital currency exchange, who must now be involved in resolving his charges in court in the coming months, announced Richard Teng, a longtime member of Binance and the head of the regional markets department of this exchange, as his successor in his resignation letter published last night. .
Before joining Binance, Teng was at one point the chief legal supervisor of the Singapore Stock Exchange, and Zhao also said that he is sure that with Teng’s presence in this role and alongside the Binance team, the best days are waiting for this group and the digital currency industry as well.
The former CEO of Binance explained his future as follows:
First, I will take time to rest. For after that, my idea right now is to probably make passive investments, become a shareholder or own a small amount of tokens in blockchain, web3, DeFi, artificial intelligence and biotech startups. I can no longer imagine myself as the CEO of a startup. I am satisfied that I had a good opportunity and luck in the field of entrepreneurship. If anyone cares to listen, he may appear as a mentor or mentor to a small number of future entrepreneurs. At least I can tell them what not to do.
Zhao concluded his message with these words:
I am proud to say that in our resolutions with US agencies, they have never said that Binance stole funds from its users or manipulated the market. Instead of capital [کاربران] It is safe (!Funds are SAFU).