Binance CEO Changpeng ‘CZ’ Zhao is set to resign from the world’s largest cryptocurrency exchange as part of an agreement with the U.S. Department of Justice, according to a report by the Wall Street Journal. Zhao will reportedly step down and accept allegations of violating anti-money laundering laws.
Resignation Decision from Binance CEO
The broader digital currency ecosystem is currently in a tense situation following news that the DOJ will make multiple announcements related to crypto. Amidst current heightened speculation, one possibility, according to the Wall Street Journal, is the resignation of the iconic crypto personality.
In addition to the resignation, the report suggests that the iconic crypto figure has also accepted the charge of violating the United States’ anti-money laundering rules.
While the market awaits the DOJ’s anticipated $4 billion announcement, a Forbes source claimed that the agreement would be between the DOJ, the Commodity Futures Trading Commission (CFTC), and Binance. The proposed settlement agreement will reportedly not include the Securities and Exchange Commission (SEC), which regulates and accuses Binance of operating as an unregistered securities and derivatives platform.
There are currently many speculations about the proposed resolution. While it remains unclear whether Binance will fully pay the requested $4 billion demanded by the Department of Justice, market experts suggest that, regardless of the amount, the agreement could be one of the most significant deals in the broader financial ecosystem.
The DOJ has been investigating whether Binance Exchange has violated the Customer Identification Program and Anti-Money Laundering (AML) rules since 2018, attempting to determine if it allowed sanctioned individuals to access its platform.
If the agreement is successfully reached, this situation could be a turning point for the industry and may further boost the prices of assets. Many cryptocurrencies, including Bitcoin (BTC), Binance Coin (BNB), and Ethereum (ETH), experienced an uptick in prices when the news of the agreement was first announced.
What’s Next for the Cryptocurrency Market?
In the past two years, a trend has emerged in the crypto ecosystem where trading platforms are settling charges with regulatory bodies such as the DOJ, SEC, and CFTC.
Kraken, one of the firms that paid the SEC $30 million earlier this year to settle a case alleging it operated a staking product as an unregistered security. The exchange has now been included in a lawsuit similar to the one the market regulator filed against Binance and Coinbase.
As part of this settlement trend, the SEC reportedly demanded over $700 million from Ripple Labs to sell XRP to institutional investors. Crypto lawyers believe the ultimate resolution will be a fraction of this amount.
This move is part of a historic deal aimed at shielding the crypto giant. The CEO is expected to formally present his defense in a federal court in Seattle. Binance is expected to accept the criminal charge and agree to a staggering $4.3 billion penalty. This amount covers penalties for both criminal and civil claims put forward by regulatory bodies.
After the completion of the record-breaking investigation into Binance’s operations by U.S. Attorney General Merrick Garland, he is expected to announce the charges later today.
The proposed settlement amount is unprecedented in the financial sector. Changpeng Zhao, widely known as “CZ,” founded Binance in 2017, quickly turning it into the largest cryptocurrency exchange.
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