Changpeng Zhao will also step down as chief executive of the world’s largest crypto-exchange.
Image source, Getty ImagesThe chief executive of Binance, Changpeng Zhao, has resigned after pleading guilty to money laundering.
“I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself”, he said in a post on X.
The Justice Department said it was requiring Binance, the largest crypto-exchange in the world, to pay $4.3bn (£3.4bn) in penalties and forfeitures.
It said Binance had helped users bypass sanctions across the world.
“Binance enabled nearly $900 million in transactions between US and Iranian users, and facilitated millions of dollars in transactions between US users and users in Syria, and in the Russian occupied Ukrainian regions of Crimea, Donetsk and Luhansk”, a spokesperson said.
Binance, which is registered in the Cayman Islands, is known as the world’s largest platform for buying and selling cryptocurrencies and other digital assets
The Justice Department also said the exchange had made it easy for criminals and terrorists to move money.
“Between August 2017 and April 2022, there were direct transfers of approximately $106 million in bitcoin to Binance.com wallets from Hydra. Hydra was a popular Russian darknet marketplace, frequently utilised by criminals, that facilitated the sale of illegal goods and services,” the department said.
Binance must now report suspicious activity to federal authorities.
“This will advance our criminal investigations into malicious cyber activity and terrorism fundraising, including the use of cryptocurrency exchanges to support groups such as Hamas,” the Justice Department said.
Richard Teng, the company’s head of regional markets, has been named the new CEO.
In a post on X, Changpeng Zhao said it was “not easy to let go emotionally.”
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In March, US regulators sought to ban Binance, alleging that the firm had been operating in the country illegally.
The lawsuit from the Commodity Futures Trading Commission (CFTC) said the firm cultivated US business while failing to register properly with authorities.
It accused Binance of breaking numerous US financial laws, including rules intended to thwart money laundering.
At the time, Binance defended its practices.
It said it had made “significant investments” to ensure that US users were not active on the platform, including blocking users identified as American citizens or residents, or who had a US mobile number.
The firm was also hit with another lawsuit in June.
The company was accused of a “web of deception” by The Securities and Exchange Commission (SEC). The agency said the trading platform and Zhao, its founder, ignored the rules meant to protect investors, in order to keep operating in the US.
At the time, Binance said it would defend itself “vigorously”.
US authorities had pledged to use existing laws to root out fraud and other issues in the crypto industry, especially after the dramatic collapse of Binance rival FTX last year.
Earlier this month Sam Bankman-Fried, the founder of FTX, was found guilty of fraud.