Binance founder Changpeng Zhao, also known as “CZ,” was sentenced to four months in prison earlier this year for permitting extensive money laundering activities on the world’s largest cryptocurrency exchange.
In November 2023, both Binance and its then-CEO Zhao admitted to money laundering violations, allowing international transactions that breached U.S. sanctions. As part of the plea agreement, Binance consented to pay $4.3 billion in fines, while Zhao agreed to a $50 million fine and resigned from his position.
Richard Teng, formerly Binance’s regional markets head and an ex-regulator in Abu Dhabi, has been appointed as the new CEO. He is implementing significant changes within the company, such as establishing a headquarters—an indication that Binance is moving away from its previous stance that a decentralized company does not require a physical office. This shift may be a signal to regulatory authorities that the exchange is pursuing a restructuring following Zhao’s exit.
In a related development, Do Kwon, co-founder of crypto company Terraform Labs, is currently awaiting extradition to either the U.S. or South Korea, where he faces potential charges.
Terraform Labs faced a major collapse in 2022, which had a profound impact on the cryptocurrency market. Their stablecoin, TerraUSD (UST), was pegged to another cryptocurrency, Terra (LUNA), maintaining a value where $1 UST equaled $1 USD worth of LUNA. However, in May 2022, LUNA’s value plummeted from over $120 per coin to nearly zero, leading to a market cap loss of over $50 billion for UST/LUNA and causing a $400 billion crash in the broader crypto market.
The SEC has charged Terraform and Kwon with misleading promotion and the sale of crypto tokens, especially focusing on the algorithmic stablecoin TerraUSD (UST).
In March 2023, Kwon was arrested for forging travel documents while trying to leave Montenegro. Earlier this year, he agreed to a $4.47 billion settlement to resolve a civil lawsuit initiated by the U.S. Securities and Exchange Commission.