Earlier this year, Binance founder Changpeng Zhao, also known as “CZ,” was sentenced to four months in prison for facilitating widespread money laundering on the world’s largest cryptocurrency exchange.
In November 2023, Binance and then-CEO Zhao admitted to money laundering charges for enabling transactions that violated US sanctions. As part of the settlement, Binance agreed to pay $4.3 billion in fines, while Zhao himself agreed to pay a $50 million fine and resign from his position.
Richard Teng, formerly the regional director and markets head at Binance and an ex-regulator in Abu Dhabi, has since taken over as CEO. Teng is implementing significant changes, such as seeking a permanent headquarters for the firm, a move that contrasts with Binance’s previous stance that a decentralized company doesn’t need a physical office. This shift may indicate to regulatory authorities that Binance is aiming to restructure and rebuild following Zhao’s departure.
In other news, Do Kwon, co-founder of the crypto company Terraform Labs, once a prominent figure in the cryptocurrency world, is now awaiting extradition to either the U.S. or South Korea, where he may face charges.
Terraform Labs faced a catastrophic collapse in 2022, which had far-reaching consequences for the cryptocurrency market. Terraform’s stablecoin, TerraUSD (UST), was pegged to its cryptocurrency Terra (LUNA), maintaining a $1 UST to $1 USD value in LUNA. However, in May 2022, LUNA’s value fell from over $120 per coin to nearly zero, erasing over $50 billion in UST/LUNA market capitalization and triggering a crash that wiped out $400 billion from the broader crypto market.
The U.S. Securities and Exchange Commission (SEC) filed a case against Terraform and Kwon for the deceptive promotion and sale of crypto tokens, specifically the algorithmic stablecoin TerraUSD (UST).
Kwon was arrested in March 2023 for forging travel documents while attempting to leave Montenegro. Earlier this year, he agreed to pay $4.47 billion to settle a civil lawsuit filed by the SEC.