Inside Binance’s Guilty Plea and the Biggest Fine in Crypto History
The king of crypto’s largest outlaw empire told employees for years that he would never turn himself in. But on Tuesday, a jittery Changpeng Zhao showed up in a Seattle federal court to plead guilty to violating U.S. money-laundering rules.
“I’ve not caused problems before, I’ve never been a criminal. And I’ve never been into a courthouse before. So this is new to me," Zhao told a judge.
Hours earlier, Zhao and his company, Binance, agreed to plead guilty to resolve a Justice Department criminal investigation that has dogged the world’s largest cryptocurrency exchange almost since its launch. As part of its plea, Binance will pay a $4.3 billion fine, and Zhao stepped down as CEO. He faces a prison sentence as long as 18 months.
It was a massive twist in the life of the crypto industry’s most influential figurehead, who launched the online exchange in 2017 and developed it into a money-spinning trading machine. He became a multibillionaire along the way. The Justice Department said Zhao’s refusal to abide by financial-crime laws, in pursuit of unfettered trading profits, turned his exchange into a colossal money-laundering hub for terrorists, cybercriminals and customers in sanctioned countries such as Iran and Russia.
His decision to come to terms with the government’s charges reflected a sense of pragmatism. The deal allows Binance to continue to operate. Zhao, 46 years old, will move to the sidelines, but retains his ownership.
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