Binance.US Addresses Troubles Facing Global Exchange
Binance.US has made it clear that it is distinct its parent company, stating that it operates independently and is not involved in the recent enforcement settlements against Binance and its Former CEO, Changpeng Zhao. The exchange has emphasized that it is compliant with the US regulations although it shares technology with Binance.
In light of the recent developments, Zhao has stepped down from his position as Chairman of Binance.US’s Board of Directors. This decision involves transferring voting rights and relinquishing governance.
According to a statement issued by the company on X (formerly Twitter), Binance.US has expressed gratitude for CZ’s important role in guiding the platform. Norman Reed, the new CEO of Binance.US will continue to lead the crypto exchange.
SEC Investigations, CZ’s Legal Battles, and Penalties
Currently, the Securities and Exchange Commission (SEC) is investigating Binance and Zhao. The regulator is probing alleged control of Binance’s affiliate in the US by the global crypto exchange. Binance.US faces ongoing regulatory actions from the SEC regarding alleged unregistered securities offerings to US investors.
Meanwhile, a federal judge has issued a ruling, restricting CZ’s return to the UAE. Judge Richard Jones suspended a decision to allow CZ to travel to the UAE until a decision is made following his guilty plea for violating anti-money laundering and US sanctions violations.
CZ’s plea deal includes a bond of $175 million, secured by $15 million in cash, ensuring his appearance for sentencing. Despite stepping down as Binance’s CEO, he faces a potential maximum prison term of 10 years, expected to be reduced to 18 months, and a $50 million fine.
Binance itself admitted guilt, agreeing to pay $4.3 billion in penalties. The charges include civil lawsuits, including one involving celebrity endorsers like Cristiano Ronaldo, Jimmy Butler, Graham Stephan, and Ben Armstrong.
Binance’s Multi-Front Enforcement Actions
Binance agreed to pay over $7.1 billion in combined settlements to the US Department of Justice (DoJ) and the Commodity Futures Trading Commission.
In addition to the financial penalties, Zhao and Former Chief Compliance Officer, Samuel Lim, face civil monetary penalties. Zhao has since stepped down as Binance’s CEO. The exchange will exit the US and comply with stringent sanctions obligations, subject to a five-year monitorship.
The settlement does not encompass the charges brought by the US Securities and Exchange Commission (SEC), indicating an impending legal battle unless a separate settlement is reached.
Zhao acknowledged mistakes, while Binance emphasized efforts toward user protection and compliance. Richard Teng, former Head of Regional Markets, takes the helm as the new CEO amidst this regulatory turbulence.