Binance CEO Resigns and Settles Lawsuits With $4.3 Billion Fine
Summary
Binance, the world’s largest crypto exchange, has agreed to pay a $4.3 billion fine to settle lawsuits in the US out of court. As part of the deal, CEO Changpeng Zhao (CZ) has resigned with immediate effect. The settlement resolves investigations and lawsuits against CZ and Binance by the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
Introduction
In a significant development for the crypto industry, Binance’s founder and CEO, Changpeng Zhao (CZ), has resigned following a deal between the exchange and the US Department of Justice. The agreement includes a $4.3 billion fine to settle ongoing legal issues. The settlement effectively ends investigations and lawsuits against CZ and Binance by the SEC and CFTC. Reports of a potential out-of-court settlement had been circulating earlier in the week.
Main Points
- Binance, founded by CZ in 2017, grew rapidly to become the largest crypto exchange with over 150 million customers.
- CZ stated that the settlement with US authorities confirmed that Binance had not misused customer funds or engaged in market manipulation.
- The settlement also revealed previously withheld court documents, which implicated CZ in allowing major US clients to trade on Binance, despite it being prohibited by US law.
- Although CZ remains the majority shareholder, Richard Teng will assume the role of CEO immediately.
- The price of Binance’s native token, BNB, fell nearly 10% following the news.
Conclusion
The resignation of CZ and the billion-dollar settlement mark the end of a battle between Binance and the SEC. While some believe the penalties are disproportionate to Binance’s innovative contributions, the SEC likely views the settlement as a significant victory. This outcome could have implications for ongoing SEC proceedings against other crypto exchanges, such as Coinbase and Kraken. Binance can now move forward without these legal issues and focus on the “next 50 years.”