Binance Founder to be Sentenced, Pleads Guilty to Money Laundering Charge

Changpeng Zhao, Binance’s creator, has pleaded guilty to accusations of money laundering and will be sentenced to three years in jail.

Zhao, who admittedly broke US anti-money laundering regulations and resigned as CEO of Binance in November, is facing a 36-month term from US authorities. Zhao and the corporation were fined $50 million for their violations of the Bank Secrecy Act, resulting in a monetary penalty of $4.3 billion (£3.4 billion).

Despite the penalties, Zhao’s fortune as the owner of a critical asset in the $2.5 trillion cryptocurrency market will continue unabated. Zhao is the 29th wealthiest person in the world, with an estimated net worth of $41.6 billion, as reported in the Bloomberg Billionaires Index. The judge presiding over the case received a letter from Zhao last week in which he expressed regret for his conduct.

Richard Teng, who formerly served as head of regional markets at Binance and has experience in regulation, is the next chief executive officer of the exchange. At a conference this month, Teng revealed Binance’s hidden structure, stating that “a few jurisdictions” are being considered for its worldwide headquarters.

The percentage of the spot trading market that Binance controls has decreased from 56.5% in March 2023 to 45.4% in the most recent month. Its rate of the bitcoin futures market has dropped from above 50% a year ago to 40%. Due to the several lawsuits filed against Binance, including one currently ongoing from the US Securities and Exchange Commission (SEC), several investors have begun to doubt Binance’s reliability as a financial institution.

Despite this, Binance claims that over $11 billion has flowed into the exchange this year due to the spike in Bitcoin’s price.

Authorities filed thirteen allegations against Binance businesses and Zhao in June last year, accusing them of raking billions of dollars while jeopardizing investors’ assets. The SEC lawsuit continues to cast a shadow over the firm. Although the accusations have disappointed Binance, they indicate that the firm is still dealing with legal matters.