CZ Quits CEO Role, Binance Faces $4.3 Billion Fine
It all started and finished with a long post on X (formerly Twitter). Changpeng Zhao (CZ), the face of Binance, decided to step down as CEO. This significant decision came after DOJ press release on November 21, stating that Binance and its CEO pleaded guilty to federal charges in a US$4.3 billion settlement.
After a lengthy conflict involving Binance, the SEC, and the DOJ, CZ's resignation has created quite a buzz in the cryptocurrency world and its market. Let us take you through the key moments of this incident.
June 2023: SEC sues Binance
The Securities and Exchange Commission (SEC) is suing Binance and its CEO, Changpeng “CZ” Zhao, for violating U.S. securities trading rules. They've brought forth 13 charges, including:
Tried to bring in customers from the United States to its unregulated global trading platform;
Misappropriating users' funds;
Providing regulators and investors with false or exaggerated information.
July 2023: Binance lays off employees
Under increasing pressure from regulatory investigations in the United States, Binance has downsized its workforce just days after experiencing a series of executive departures. More than 1,000 people have been laid off in the past few weeks.
September 2023: Binance.US CEO Brian Shroder stepped down
The legal battle involving the SEC, Binance, and CZ has escalated. Binance.US CEO Brian Shroder left the job after two years, and Binance.US is saying goodbye to a third of its employees.
21 November 2023: Binance and CZ have admitted guilt to federal charges
The press release by the U.S. Department of Justice (DOJ) stated that Binance admits it engaged in violations related to anti-money laundering, such as maintaining an effective AML program, as well as unlicensed money transmitting and sanctions. This is the biggest corporate settlement ever, and even the top guy, CZ, is facing criminal charges.
CZ could be looking at a max of 10 years in jail and a hefty US$50 million fine, though his actual punishment might end up being less.
22 November 2023: CZ Resigns from Binance CEO role
Shortly after the news, CZ posted a long and heartfelt message, announcing he had decided to resign and take a breather from his career before he started taking up DeFi-related interests and more.
As of 4:36 am on 22 Nov, CZ announced he will bid farewell to his CEO role
While many of his 8.7 million fans on X may feel heartbreaking, CZ mentioned, “As a shareholder and former CEO with historical knowledge of our company, I will remain available to the team to consult as needed,” in his post. He also tagged the person who will continue his mission in the post, namely Richard Tang, who “was” the Global Head of Regional markets in Binance.
Who is the new Binance CEO, Richard Teng?
While Richard Teng might not be as well-known on social media as CZ, his extensive experience suggests he's well-prepared for the role. With a notable history, including but not limited to:
6 years as the CEO of Abu Dhabi Global Market (ADGM) from 2015 to 2021
7 years as the CRO at Singapore Exchange Limited (SGX) from 2007 to 2015
Richard's experience could mean smooth sailing for the company's future. However, it is far too early to foresee this, and the ripple is bigger than just a change of role in Binance.
How Will This Change Affect the Cryptocurrency Market?
It's worth noting that when the news about Changpeng Zhao (CZ) dealing with the SEC first surfaced in June 2023, Bitcoin experienced a significant 6% drop, hitting a three-month low at US$26,000.
For now, the market is still digesting both Binance’s federal charges outcome and CZ’s resignation news. Brace yourself for potential shake-ups among the crypto exchange big players in the days and months to come.
The rise and fall of the big players have proved that transparency matters, be it to users, stakeholders, or government-regulated bodies. One of the methods to know whether a crypto exchange is safe and transparent is to check their proof of reserves, and whether it’s verifiable through Merkle Tree. Merkle tree is used to prove that a cryptocurrency exchange has the reserves it claims to have. No matter how the crypto world or market fluctuates, it’s our own responsibility to ensure we have placed our assets in a secure space.
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