Earlier this year, Binance founder Changpeng Zhao, commonly known as “CZ,” was sentenced to four months in prison for facilitating extensive money laundering activities on the world’s largest cryptocurrency exchange.
In November 2023, Binance and Zhao, then the CEO, admitted to money laundering charges for allowing customers from other countries to engage in transactions that violated U.S. sanctions. As part of the settlement, Binance agreed to pay $4.3 billion in fines, while Zhao personally agreed to a $50 million fine and stepped down from his role.
Richard Teng, Binance’s regional markets head and a former regulator in Abu Dhabi, has since assumed the position of CEO. He is implementing significant changes within the firm, including the search for a headquarters location, which deviates from Binance’s previous stance that a decentralized company does not require an office. This move could be seen as an effort to demonstrate to authorities that Binance is restructuring following Zhao’s departure.
In a related development, Do Kwon, co-founder of Terraform Labs, once a prominent figure in the crypto world, is currently awaiting extradition to either the U.S. or South Korea, where he may face charges.
Terraform Labs collapsed in 2022, severely impacting the cryptocurrency sector. The company’s stablecoin, TerraUSD (UST), was linked to the cryptocurrency Terra (LUNA), meaning that $1 UST was always equivalent to $1 USD worth of LUNA. However, in May 2022, the value of LUNA crashed from over $120 per coin to nearly zero, causing a loss of over $50 billion in UST/LUNA market capitalization and triggering a $400 billion decline in the wider crypto market’s value.
The U.S. Securities and Exchange Commission (SEC) filed a case against Terraform Labs and Kwon for deceptive promotion and sale of crypto tokens, particularly the algorithmic stablecoin TerraUSD (UST).
Kwon was arrested in March 2023 for forging travel documents while attempting to leave Montenegro, a southern European country. Earlier this year, he agreed to pay $4.47 billion to settle a civil lawsuit filed by the SEC.