In a few years, the cryptocurrency exchange Binance became one of the richest companies in the world. Now it must pay a billion-dollar fine to the USA, and the CEO has to go.
The crypto exchange Binance must pay a fine of 4.3 billion US dollars to the USA. This is due to a years-long investigation of the company by US authorities, which has now come to a conclusion.
The company is accused by US authorities of having supported terrorists and cybercriminals. It is primarily about violations of the sanctions imposed against Iran, Cuba, and Syria. After 3 years of scrutiny, the accusations have now been confirmed.
Binance grew rapidly but also benefited from the collapse of competitors
Binance has grown rapidly in a few years: The cryptocurrency exchange, backed by one of the richest people in the world, Changpeng Zhao, started in 2017 with an initial capital of 15 million. By mid-2022, the exchange reportedly had a market value of 92.5 billion US dollars. In particular, Binance is said to have greatly benefited from the collapse of the crypto exchange FTX. This is reported by colleagues from Arstechnica.
With the fine, they want to hit the company hard. A billion-dollar fine is also not an amount that Binance can just pay out of pocket. After all, cryptocurrencies like Bitcoin are currently at a record high.
What happens to the head of the company? Zhao, the head behind the company, must leave his position as CEO. According to the agreement, the regulators will appoint an independent “Compliance Monitor” to ensure the transparency of Binance’s operations for three years.
A “Compliance Monitor” checks whether a company adheres to laws and takes the necessary steps to comply with the relevant laws, guidelines, and regulations. Zhao may not be active for his company until the end of this compliance arrangement.
Zhao stated himself on Twitter in a long post that he would take a break but will still be available to advise the Binance team, at least to the extent allowed by the agreements. He considers himself “a shareholder and former CEO with historical knowledge of our company.”
By the way, Zhao only has to pay a fine of 15 million US dollars. Whether he will pay the fine and face imprisonment is another question, as he is currently in the United Arab Emirates, and that country has no desire to extradite Zhao (via reddit.com).
However, the people’s money is definitely safe, he said. Despite the high fine that the company has to bear. “Binance is no longer a baby,” wrote Zhao on Twitter/X. “It’s time for me to let it run. I know Binance will continue to grow and excel with the deep bank it has.”
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