(New York) The largest cryptocurrency exchange platform in the world, Binance, and its general director, Changpeng Zhao, have reached an agreement with the American authorities, which provides for the resignation of the emblematic boss.
“CZ”, its nickname, has agreed to plead guilty to violating US anti-money laundering laws, the US Department of Justice announced on Tuesday.
He stated his position before a federal judge in Seattle, Washington, during a hearing Tuesday.
Aged 46, Changpeng Zhao faces several years in prison. His sentence will be pronounced at a later date.
“I made mistakes and I must take responsibility for them,” he wrote on his X account (formerly Twitter).
He will be replaced at the head of Binance by Richard Teng, who was until now responsible for regional markets.
As part of an overall agreement, Binance will also plead guilty to violations of US law.
The company agreed to pay fines of $3.4 billion and $968 million to two agencies under the US Treasury, the Treasury said.
American authorities have been investigating the platform since at least 2018, according to several American media, but have not officially taken legal action until now.
Co-founder, boss and majority shareholder of the company, Changpeng Zhao is the most famous personality in the world of digital currencies.
Binance is, by far, the largest cryptocurrency exchange, with around $12 billion in transactions carried out in the last 24 hours, according to the specialist site CoinMarketCap.
The American investigation, widely reported in the press, has for several years posed a threat to Binance, several executives of which have resigned in recent months.
Growth rather than conformity
In addition, the platform was taken to court this year by the two main financial market regulatory agencies, the SEC and the CFTC.
The latter criticizes Binance in particular for not having taken sufficient measures to prevent money laundering. Customers could access the platform without their identity having been previously verified.
According to investigations by two Treasury agencies, Binance did not take measures to prevent transactions carried out by movements such as the Islamic State group, al-Qaeda or the Ezzedine al-Qassam brigades, the armed wing of Hamas.
“Failing to implement anti-money laundering measures, Binance allowed a wide range of criminal actors to conduct trades on the platform,” argued the US Treasury.
Digital currencies are regularly used by criminal organizations to transit their assets.
The sector offers, overall, a certain anonymity and fewer guarantees against money laundering than the traditional financial system, subject to very heavy compliance obligations.
“Since its origins, Binance, and its founder Changpeng Zhao, have favored (respectively) growth and personal wealth over financial regulations intended to prevent the laundering of criminal assets,” commented Seattle federal prosecutor Tessa Gorman, quoted in a press release.
The investigation also revealed that after committing, from 2019, to no longer accept American customers, Binance retained some, in particular those who were the most active and generated considerable turnover for the site.
“When Binance launched, it did not have the appropriate compliance control instruments for the company it was becoming,” reacted the group, in a message posted on its site.
The company recognized “unfortunate decisions” and affirmed “to assume its responsibilities regarding this chapter” of its history.
According to the Wall Street Journal, the agreement reached with the authorities would allow Changpeng Zhao, a Canadian citizen born in China, to retain his stake in the capital of Binance.
Binance has committed to the American authorities to use, for a period of three years, the services of an external observer responsible for compliance, and to comply with the texts in force in this area.
Changpeng Zhao said he could not see himself taking the helm of a new start-up. “I am satisfied with having been the (lucky) entrepreneur of a single adventure,” he wrote.
He also mentioned the possibility of advising young entrepreneurs. “Worst case scenario, I could at least tell them what not to do. »