Binance, the world’s largest crypto exchange, tried to frame a vision for its future in a blog post published in the wake of its founder’s departure.
The company’s co-founder and CEO Changpeng Zhao, or CZ, agreed to step down as part of a plea deal with the U.S. Department of Justice earlier today. He plead guilty to violating and causing a financial institution to violate the Bank Secrecy Act, agreed to a $50 million fine and may face prison time. Binance veteran Richard Teng was named as his successor.
Binance itself will pay a mammoth $4.3 billion fine for violating money transmission laws and U.S. sanctions. Attorney General Merrick B. Garland slammed the company, stating that it “did more than just fail to comply with federal law – it pretended to comply.”
Questions are already being asked about whether Binance can survive both the historic fine and the departure of its CEO. The company sought to assuage some of those fears in its blog post.
While the firm conceded that it lacked adequate compliance controls in its early days, it emphasized that it has “worked hard to restructure our organization and personnel and upgrade our systems.”
No misappropriation of user funds
Binance also sought to emphasize that it has at all times maintained 1:1 backing for user assets — highlighting that, in the settlement, U.S. regulators did not allege misappropriation of user funds or market manipulation. Such misappropriation of funds was central to the FTX fraud, for which former CEO Sam Bankman-Fried was found guilty earlier in November.
More than $800 million has been yanked from Binance in the past 24 hours, according to DeFiLlama data.
Still, the company tried, in its blog post, to frame a positive vision for the future.
“With the compliance and governance enhancements enshrined in our commitments, we can begin to share our vision for Binance’s exciting future and the future of the crypto industry. We are confident that Binance will emerge as a stronger company as we lay the foundation for the next 50 years,” it wrote.
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About Author
Ryan Weeks is deals editor at the The Block, focused on fundraising, M&A and institutional trends in the crypto space, among other things. He is particularly interested in investigative work — so please send tips! Ryan previously worked at Financial News, Dow Jones as a fintech correspondent in London. Prior to that, he wrote for several different publications, including Sifted, AltFi and Wired. Beyond journalism, Ryan is a keen reader and writer. He enjoys all things active, especially running, rugby, climbing and tennis.