If you're someone who pays attention to cryptocurrency, then you must have heard of the name Changpeng Zhao. He is the founder of Binance and the richest man in China, and his wealth once surpassed that of Jack Ma and Pony Ma. Known as the "myth" of the cryptocurrency world, his Binance exchange is the world's largest cryptocurrency platform, with tens of billions of dollars traded every day.
However, this myth has been shattered. Changpeng Zhao was indicted by the U.S. Department of Justice on suspicion of money laundering, sending money without a license, and violating sanctions, and was detained in the United States. He had to plead guilty to the United States and agreed to pay a $4.3 billion fine, one of the largest corporate fines in U.S. history. He was also forced to resign as CEO of Binance, abandoning his cryptocurrency empire. His fortune evaporated overnight, his popularity plummeted, and his dreams shattered.
What a tragic ending, what a thrilling story. You may wonder how Changpeng Zhao went from an ordinary programmer to a cryptocurrency giant, and how he was destroyed by the United States. You may wonder what kind of person Changpeng Zhao is, what kind of ideals he has, and what mistakes he has made. You may be wondering how Changpeng Zhao's case has affected the cryptocurrency industry, and what his future holds.
Changpeng Zhao's entrepreneurial journey has not been easy. In 2017, he founded Binance, a cryptocurrency exchange based on blockchain technology, with the hope of providing a secure, convenient, and transparent platform for users around the world. However, due to the unclear legal status and regulatory environment of cryptocurrencies, Binance is often questioned and suppressed by various countries. Changpeng Zhao has said that he and his team are constantly moving in search of a friendly jurisdiction, but it is difficult to find a long-term habitat.
Binance's business also faces stiff competition and risks. As the world's largest cryptocurrency exchange, Binance processes billions of dollars in transactions across hundreds of different digital assets every day. These transactions can be threatened by hackers, market volatility, user complaints, and lawsuits. Changpeng Zhao once admitted that Binance suffered a serious hack in 2018 that caused users to lose about $40 million in Bitcoin. In order to redeem the trust of users, Changpeng Zhao announced that Binance will use its own reserves** to compensate users for their losses and strengthen security measures.
Despite all the difficulties and challenges, Changpeng Zhao did not give up on his dream of starting a business. He has been relentless in driving Binance's innovation and development, providing several advanced products and services to the cryptocurrency industry. For example, Binance has launched its own public chain and smart contract platforms, Binance Chain and Binance Smart Chain, to provide developers and users with a high-performance, low-fee, Ethereum-compatible blockchain ecosystem.
Binance has also launched Binance Academy, a free** educational platform that aims to educate people about blockchain and cryptocurrency. In addition, Binance also actively participates in social welfare undertakings and has established the Binance Charity Association to support charity projects in the fields of education, medical care, and environmental protection around the world.
The reason why Changpeng Zhao and Binance were prosecuted and fined by the United States is mainly because they violated the anti-money laundering laws and sanctions of the United States. The United States believes that Changpeng Zhao and Binance have taken advantage of the anonymity and cross-border nature of cryptocurrencies to provide a convenient platform for illegal actors around the world, thereby jeopardizing the United States*** and financial stability.
According to the U.S. Department of Justice, between 2017 and 2021, Changpeng Zhao and Binance willfully violated the requirements of the Bank Secrecy Act (BSA), failed to establish and execute effective anti-money laundering (AML) and counter-terrorist financing (CFT) programs, failed to register as a money services business (MSB), failed to report suspicious activity (SAR), failed to verify customer identity (KYC), and failed to comply with U.S. economic sanctions laws.
According to the U.S. Department of Justice, Changpeng Zhao and Binance violated the U.S. Foreign Assets Control Act (OFAC) by allowing customers from Iran, Cuba, Syria, Venezuela, North Korea, and other U.S.-sanctioned countries and regions to trade, exchange, transfer, and withdraw cryptocurrencies through the Binance platform.
The U.S. Department of Justice also alleges that Changpeng Zhao and Binance violated the U.S. Anti-Terrorism Act (ATA) by failing to prevent and report suspicious transactions related to terrorist groups, including Hamas, al-Qaeda, and the Islamic State.
The U.S. Department of Justice pointed out that Changpeng Zhao and Binance's actions not only endangered the national interests of the United States, but also harmed the global financial order and social security. The U.S. Department of Justice said it will continue to combat the use of cryptocurrencies for money laundering and sanctions evasion to protect the rule of law and justice in the United States and internationally.
In the face of strong pressure and evidence from the United States, Changpeng Zhao and Binance finally chose to plead guilty and settle. Recently, Changpeng Zhao pleaded guilty in federal court in Seattle to three criminal counts, including sending money without a license, conspiracy to launder money, and violating sanctions.
Under the terms of the settlement, Changpeng Zhao agreed to pay a $50 million fine and resign as Binance's CEO to no longer participate in any of Binance's business activities. Changpeng Zhao also agreed to accept the supervision and cooperation of the United States**, provide relevant information and documents of Binance, and testify in court as a witness. Changpeng Zhao's sentencing hearing is scheduled for February 24, 2024, and he faces up to 18 months in prison, but prosecutors have left open the possibility of demanding harsher punishments.
Binance itself pleaded guilty to three civil counts, including breaches of bank secrecy laws, breaches of commodity ** trading laws, and breaches of foreign assets control laws. Binance agreed to pay $43 to the United States**$6.8 billion in fines and restitution, including forfeiture of $25$100 million in illegal income, paid 18$500 million in criminal fines, as well as $50 million in civil penalties. Binance also agrees to accept US**-designated regulators to supervise and reform its operations and comply with US laws and rules.
Changpeng Zhao and Binance's confession and reconciliation is a major blow to the cryptocurrency industry in the United States** and a major event in the history of cryptocurrency. Changpeng Zhao and Binance's fines are among the largest corporate fines in U.S. history and among the largest in the cryptocurrency space. The crimes of Changpeng Zhao and Binance have also exposed the risks and drawbacks of cryptocurrencies, triggering global regulation and reflection on cryptocurrencies.