In a significant development on Tuesday, November 28, Changpeng Zhao (CZ), the founder and former CEO of Binance, has decided to step down as chairman of the board for Binance’s US affiliate.
Binance.US made this announcement through a tweet, clarifying that the US affiliate was not part of the recent substantial multibillion-dollar settlement between Binance and various US regulators and law enforcement entities. As part of this move, Zhao will transfer his voting rights to a proxy. In their announcement, Binance.US stated that it remains fully operational. The official tweet announcement reads:
“Binance.US is not a party to the settlements announced last week, nor do we have any outstanding enforcement matters with the DOJ, FinCEN, OFAC, or CFTC. Binance.US continues to be led by Norman Reed and our existing, experienced management team. We are well capitalized to continue to build and grow our platform and to do so with renewed clarity and momentum, while maintaining the same customer first commitment.”
Last week, Changpeng Zhao entered a guilty plea in a Seattle court, acknowledging the violation of the Bank Secrecy Act and causing a financial institution to do the same. As part of this legal resolution, he agreed to a $50 million fine and subsequently stepped down from his role as CEO of Binance.
Court Sentencing for CZ
A US District Court judge, Richard Jones, has ruled that Changpeng Zhao, the founder of Binance, must remain in the United States until a further review, ahead of his sentencing in February. The initial condition that would have permitted Zhao to return to his residence in the United Arab Emirates has been stayed pending the court’s resolution of the government’s motion for review.
The legal action against Binance included accusations of operating in the US without proper registration, enabling transactions with US crypto investors in sanctioned regions. In the $4.3 billion settlement, Binance agreed to a “complete exit” from the US, and Zhao stepped down as CEO.
Binance, the world’s largest cryptocurrency exchange, is encountering obstacles in its plans to collaborate with Sarath Ratanavadi’s Gulf Energy Development for the launch of operations in Thailand. The recent $4.3 billion settlement with US authorities, coupled with Changpeng Zhao stepping down as CEO due to anti-money laundering and sanctions violations, has cast uncertainty on Binance’s expansion strategy. Despite these challenges, Gulf Energy retains a 51% stake in the proposed crypto exchange, with Binance holding a minority stake. Experts remain divided on the impact of Binance’s settlement on the overall plan.