Changpeng Zhao (CZ), CEO of the world’s largest cryptocurrency exchange Binance, just announced his resignation as he pleaded guilty to charges filed by regulators on Tuesday. This came in as a shock to many, but there have been ominous signs earlier leading to the event. Many in the crypto community even suspect that an invisible hand may be at work, and some fingers are pointing at BlackRock.
Binance just pleaded guilty of violating laws related to anti-money laundering, unlicensed money transmittal, and sanction rules. The company agreed to pay over $4 billion in fines in relation to the cases while CZ agreed to step down and bargained for a $50 million penalty.
In the latest blog post of Binance, the crypto exchange named the following parties to the case whom it just reached resolution:
- The US Department of Justice (DOJ)
- The Commodity Futures Trading Commission (CFTC)
- The Office of Foreign Assets Control (OFAC)
- The Financial Crimes Enforcement Network (FinCEN)
CZ’s Successor
In light of CZ’s resignation, the former Global Head of Regional Markets of Binance, Richard Teng, will take over the helm as CEO. Teng is considered to be highly qualified in the field, thanks to his three decades of experience in various regulatory agencies. Among his notable accomplishments include:
- CEO of Financial Services Regulatory Authority at Abu Dhabi Global Market (ADGM)
- Chief Regulatory Officer of the Singapore Exchange (SGX)
- Director of Corporate Finance in the Monetary Authority of Singapore (MAS)
Was BlackRock Behind Binance’s Woes?
A couple of days ago, CZ let off a post on X as a reaction to the firing of Sam Altman as CEO by the OpenAI board. Strangely, the tweet, which is shown below, sounded more personal in nature than a comment to the embattled OpenAI CEO—who just got his job back today by the way.
It shows a gloomy hint of what’s about to come in his own company, especially with the part, “Knowing when to let go control of a company you founded is one of the trickest decisions.”
For blockchain enthusiast and lawyer John E Deaton, the plea bargain was a smart move by Zhao, because he had no real choice in the first place. Aside from the fines, the move would only likely end up in two to five years of probation while the ex-CEO will get to keep a majority of his stake in Binance.
Meanwhile, there is an ongoing narrative that BlackRock may be the one pulling the strings, and Deaton highlights this with another post emphasizing how the fallout of the events could benefit the American multinational investment company. As it happens, BlackRock has 3.36% stake in Coinbase, the major rival of Binance.
The theory of the lawyer was reinforced by crypto-trader Tyler Strejilevich, explaining that BlackRock will unlikely sit idly as Binance will reap the bull market that its spot Bitcoin ETF will catalyze. Thus, it wants to be the one making a killing in selling its coins via Coinbase once Bitcoin moons.
End Notes
Untangling the conspiracy theory leading to the situation of Binance is a lot to take. Nevertheless, the analyses of John E. Deaton and Tyler Strejilevich do make a lot of sense, considering the circumstantial arguments they presented.