Binance founder and former CEO Changpeng Zhao (CZ) has been banned for life from managing the cryptocurrency exchange.
Initially, reports suggested that Zhao would be unable to return to Binance for a period of three years. However, Axios later revealed that the ban is permanent, preventing Zhao from ever resuming a leadership role at the platform.
CZ Faces Lifetime Suspension from Binance
Zhao’s legal troubles began when US authorities charged him with multiple violations tied to Binance’s operations. The allegations included offering unregistered securities, market manipulation, and deficiencies in the platform’s anti-money laundering (AML) protocols.
Despite Binance’s position as one of the world’s largest cryptocurrency exchanges, the company has faced relentless regulatory scrutiny, leading to serious legal challenges for its founder. In November, Zhao resigned as CEO of Binance as part of a deal with the US Department of Justice. The agreement required his permanent removal from the “management or operations” of the company.
“I’m sorry. I believe the first step in taking responsibility is to fully recognize the mistakes. Here I failed to implement an adequate anti-money laundering program. I realize now the seriousness of that mistake,” Zhao said in court.
Read more: Who Is Changpeng Zhao? A Deep Dive Into the Ex-CEO of Binance
Richard Teng, who succeeded Zhao as Binance’s CEO, confirmed that the founder received a lifetime ban from managing the platform. This ban was a key condition of the agreement between Binance and US authorities.
Teng also highlighted that despite stepping down as CEO, CZ remains Binance’s largest majority shareholder, allowing him to retain influence over the company’s direction. For instance, Zhao can propose changes to management or appoint new board members.
Following Zhao’s departure, Binance now has a seven-member board of directors, compared to when CZ was the sole director. To ensure compliance with the terms of the agreement, two external agents appointed by the DOJ will monitor Zhao’s adherence to the ban on participating in the management of the exchange.
The Binance founder has stated that he has no plans to hold executive positions in any companies going forward. Instead, he intends to focus on investments in emerging fields such as blockchain, artificial intelligence (AI), and biotechnology. Zhao has expressed a desire to explore opportunities in these sectors following his departure from Binance’s leadership.
Read more: 7 Best Binance Alternatives in 2024
CZ began serving his prison sentence at the Federal Correctional Institution in Lompoc, California, in July. Although federal prosecutors initially sought a three-year sentence, Zhao received a shorter term.
The defense had requested five months of probation, while the sentencing guidelines recommended 12 to 18 months in prison. In addition to the prison sentence, CZ has agreed to pay a $50 million fine, a modest amount compared to his reported net worth of approximately $33 billion.
Zhao is set to be released on September 29. Authorities recently transferred him from the Federal Correctional Institution in Lompoc to a rehabilitation center in Los Angeles, a standard step aimed at helping inmates transition back into society.
Trusted
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
