Binance founder and former CEO, Changpeng “CZ” Zhao, has stepped down from the company’s board of directors following his guilty plea to several federal charges last week.
“CZ” steps down
Zhao “has decided to step down from his role as Chairman of our Board of Directors and transferred his voting rights through a proxy arrangement, whereby his interest in the company is purely economic and he will no longer be involved in our governance,” read a statement from Binance.US posted to X Tuesday morning.
“We are exceptionally grateful to CZ for his guidance and counsel over the years,” the post on X continued. “With his support, we have established Binance.US as a destination of choice of U.S. customers seeking a superior crypto trading experience.”
News of Zhao’s resignation from Binance.US’s board of directors comes nearly a week after he pleaded guilty to violating the Bank Secrecy Act, violating the International Emergency Economic Powers Act, and failing to register Binance as a money transmitting business.
Binance coughs up billions
As a consequence, Binance must pay $4.3 billion in penalties and forfeitures and make a “complete exit” from the U.S. market while following reporting and monitoring requirements set forth by the U.S. Department of Justice. Moreover, Zhao resigned from his role as CEO as the Department of Justice announced the charges against him.
On Monday, a federal judge ruled that Zhao, a resident of Dubai, must stay in the United States until his sentencing on February 23rd, 2024.
Previously, his attorneys argued that not being able to return to Dubai would be “punitive” for his family and partner, with whom he welcomed a third child with in recent months. However, prosecutors argued that the move could be risky given the fact that the United Arab Emirates has no extradition treaty with the U.S.
What to expect next
Zhao’s guilty plea marks the end of a five-year-long Department of Justice investigation into the crypto exchange. However, the Binance founder’s legal troubles may be far from over.
According to a recent report from The Wall Street Journal, the Securities and Exchange Commission (SEC) is still investigating whether Binance had secret access to customer funds.
At a hearing on Monday in federal court, Binance.US attorneys formally requested that the ongoing SEC investigation be halted, citing a lack of evidence that assets were misused.
A federal judge has ordered both the defense and prosecution to settle their evidentiary differences by December 15th, 2023, at the latest.
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