• Tech
  • Law

Binance CEO Zhao Agrees to Plead Guilty and Pay $50 Million Fine

3 minute read
Updated: | Originally published:

Binance Holdings Ltd.’s Chief Executive Officer Changpeng Zhao agreed to plead guilty to anti-money laundering charges and pay a $50 million fine during a hearing in Seattle federal court Tuesday under a sweeping deal worked out with the Justice Department designed to keep the company operating.

Zhao agreed to step down as part of the settlement, which included the Treasury Department and the Commodity Futures Trading Commission, according to people familiar with the matter. Binance agreed to plead guilty to criminal charges and pay a $4.3 billion fine, according to people familiar with the matter. The deal ends a years-long investigation into the cryptocurrency exchange.  

The government’s case against Binance was unsealed in federal court in Washington state Tuesday, as Zhao prepared to enter his plea. The company is charged with three counts, including money laundering violations, conspiracy to conduct an unlicensed money transmitting business, and sanctions violations. 

BNB, a cryptocurrency tied to the Binance ecosystem, slipped about 5% following the news. The token had hit a five-month high earlier in the day on the news that the DOJ would soon confirm its settlement with the exchange.

The filing states that from about August 2017 until October 2022 Binance and Zhao were involved in a “deliberate and calculated effort” to profit from the US market without implementing controls required by law.

US Attorney General Merrick Garland and Treasury Secretary Janet Yellen will hold a press conference at 3:00 pm ET on Tuesday to announce more details of the settlement.

The charges come as part of a settlement negotiated between the two sides that will resolve allegations of criminal wrongdoing ranging from money laundering and bank fraud to violations of sanctions. Bloomberg News reported the settlement on Monday.

Read More: US Is Seeking More than $4 Billion From Binance to End Case 

The resolution against the world’s largest cryptocurrency exchange and its top leader represents one of the largest penalties imposed within the cryptocurrency industry, which has been facing withering scrutiny from the Justice Department, other government agencies and lawmakers.

Binance, which exploded onto the crypto scene in 2017 and almost immediately took on and surpassed larger rivals, saw its market share surge to more than 60% worldwide after the fall of FTX in November 2022. Since then, its combined market share for spot crypto and derivatives has declined to less than 44% this month, according to researcher CCData.

The Justice Department recently prosecuted FTX co-founder Sam Bankman-Fried in New York for allegedly orchestrating a multibillion-dollar misappropriation of customer funds that led to the cryptocurrency exchange’s collapse. Bankman-Fried was convicted on fraud on conspiracy charges following a trial.

Both the CFTC and Securities and Exchange Commission have sued Binance and Zhao alleging a range of violations, including mishandling customer funds and allowing Americans to illegally access the platform.

More Must-Reads from TIME

Contact us at letters@time.com