Binance CEO Changpeng ‘CZ’ Zhao has resigned from the cryptocurrency exchange he founded as part of a guilty plea deal with US authorities over money laundering and US sanctions violations that involved facilitating transactions for terrorist groups like Hamas and ISIS.

Zhao was hit with a $76 million (US$50 million) fine while his company will pay $6.6 billion (US$4.3 billion) in penalties following a US Securities and Exchange Commission (SEC) investigation and legal action against the world’s biggest cryptocurrency exchange, which accused of mishandling customer funds and lying to regulators and investors.

While the figure is substantial, Binance will continue to trade and survive the major hit to its balance sheet.

In a statement following the settlement and guilty plea, Binance said it had “reached resolutions with the US Department of Justice (DOJ), Commodity Futures Trading Commission, the Office of Foreign Assets Control, and the Financial Crimes Enforcement Network”.

It also made note that regulators didn’t allege Binance misappropriated any user funds or engaged in market manipulation.

“These resolutions acknowledge our company’s responsibility for historical, criminal compliance violations, and allow our company to turn the page on a challenging yet transformative chapter of learning and growth,” Binance said

“When Binance first launched, it did not have compliance controls adequate for the company that it was quickly becoming, and it should have. Binance grew at an extremely fast pace globally, in a new and evolving industry that was in the early stages of regulation, and Binance made misguided decisions along the way. Today, Binance takes responsibility for this past chapter.”

The crypto exchange said it had worked over the past two years to restructure and upgrade its systems.

Court documents, which alleged the violations occurred as far back as 2017, accused Zhao of telling Binance staff that it was “better to ask for forgiveness than permission” when it came to ensuring growth over compliance with the law

The DOJ said it was the “largest corporate resolution” to also include criminal charges for an executive, and saw the exchange admit “it engaged in anti-money laundering, unlicensed money transmitting and sanctions violations.”

The exchange generated more than US$1.35 billion in trading fees from US customers.

Fine line between disruptors and criminals

US Attorney-General Merrick Garland said the fines send a clear message, that “using new technology to break the law does not make you a disruptor, it makes you a criminal.”

Zhao appeared in the Seattle Federal Court on Tuesday (US time) to enter his guilty plea, which included “willfully violating” the Bank Secrecy Act and US federal law by failing to guard against money laundering and terrorist financing. As part of the deal he cannot make any statements “contradicting his acceptance of responsibility”.

Secretary of Treasury Janet Yellen was blunt, saying in a statement that “any institution, wherever located, that wants to reap the benefits of the U.S. financial system must also play by the rules that keep us all safe from terrorists, foreign adversaries, and crime or face the consequences,”

The Binance founder subsequently posted a statement on X (formerly Twitter) saying “it was not easy to let go emotionally” of the CEO but it was the right thing to do.

“I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself. Binance is no longer a baby. It is time for me to let it walk and run. I know Binance will continue to grow and excel,” he wrote.

Binance’s former global head of regional markets, Richard Teng, is the new CEO.

Zhao added that he had “not had a single day of real (phone off) break” for the last 6.5 years and was “happy that I will finally have more time to spend looking at DeFi” and “can’t see myself being a CEO driving a startup again”.

In Australia, BTC Markets CEO Caroline Bowler said the settlement agreement is a reminder of the fundamental ethos of Bitcoin and crypto.

“Bitcoin was conceived to provide a decentralised, equitable, and transparent financial system, yet its inherent nature has also made it a target for bad actors seeking to exploit the system,” she said.

“The actions taken today by the DOJ underscores the ongoing battle against nefarious activities, such as money laundering, within the crypto industry. The primary goal of money laundering is to integrate illicitly gained assets into the financial system, making it difficult for authorities to trace the funds back to their criminal origins.

“While bad actors may seek to leverage the decentralised nature of cryptocurrencies for illicit purposes, true believers in blockchain technology are committed to cleaning up the space.”

This article first appeared on Startup Daily. Read the original here.