As part of the plea agreement, Zhao is barred from working with the exchange for three years, according to a court file. He appeared in federal court in Seattle on Tuesday and will be fined $50 million. The company also pleaded guilty to violating the Bank Secrecy Act, failing to register as a money transfer business and violating the Sanctions Act.
The deal ends the Justice Department’s three-year investigation into Binance and comes months after the company was shut down. accused by regulators of functioning as an unregistered stock exchange.
Zhao’s departure marks the end of an era for one of the crypto industry’s longest-serving titans, who battled with regulators for years. Zhao was also an early investor in FTX, the struggling crypto exchange founded by Sam Bankman-Fried, which was convicted at trial of seven counts of fraud and money laundering earlier this month.
“Today I resigned as CEO of Binance,” Zhao said in a long post on, formerly Twitter, which did not mention its guilty plea but said Richard Teng, the company’s former global head of regional markets, had been named chief executive. “I made mistakes and I have to take responsibility for them. It’s better for our community, for Binance and for myself.
Court documents filed by the government indicate that Binance chose not to implement anti-money laundering measures, essentially allowing the company to become a clearinghouse for all manner of illicit financial transactions. Between 2018 and 2022, this led to nearly $900 million in financial transactions violating sanctions against Iran, according to court documents.
In its announcement, the Treasury Department accused Binance of allowing Hamas’s Al-Qassam Brigades, Palestinian Islamic Jihad, Al-Qaeda and ISIS “to transact freely, supporting activities ranging from child sexual abuse to illegal narcotics to terrorism.” The agency will monitor Binance’s financial records for five years under threat of a $150 million penalty. Tuesday’s settlement will also ensure Binance’s “complete exit from the United States,” according to a statement.
Treasury Secretary Janet Yellen said in a statement that the company “allowed money to flow to terrorists, cybercriminals and pedophiles through its platform.”
In June, the Securities and Exchange Commission came after Binance and Coinbase, another cryptocurrency exchange, are calling on Binance to freeze all assets on its US platform and accusing Coinbase of acting as a securities exchange, broker and clearing agency.
“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed – it is now paying one of the heaviest penalties in US history,” said Attorney General Merrick Garland. He noted that over the past month, the Justice Department has secured guilty pleas or convictions from the executives of two of the world’s largest cryptocurrency exchanges, namely Zhao and Bankman-Fried.
Authorities said Binance got a 20% reduction in its fine for cooperating with investigators, but noted it did not receive full credit for its cooperation because the company delayed producing key evidence, including recordings of meetings in which executives discussed U.S. legal requirements.
The plea agreement is the latest victory in the Securities and Exchange Commission’s efforts to rid the United States of bad crypto actors, said Carl Tobias, a law professor at the University of Richmond.
“Especially after what they did in the Southern District of New York with the other big crypto story this year,” he said, referring to Bankman-Fried’s conviction.
This is a developing story. It will be updated.