Listen to the Article: Guilty and Gone: Binance CEO Quits as Crypto Titan Struggles with Regulatory Pressure

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On November 21, 2023, the founder and CEO of Binance, the world's largest cryptocurrency exchange, Changpeng "CZ" Zhao, officially reached a plea deal​ with the U.S. Department of Justice, involving charges of money laundering, bank fraud, violating sanctions, and more. After pleading guilty, CZ announced on social media the next day that he had resigned from his position as CEO. It is reported that this regulatory crisis will result in Binance having to pay a fine of up to $4.3 billion to the U.S. Treasury Department. And more importantly, what may follow is the most serious regulatory crisis that this once-dominant exchange has ever faced.

Investors Withdrawing Money, Banned In Countries, Yet New CEO Still Confident

Within 24 hours of CZ's resignation, Binance suffered a withdrawal of nearly US$1 billion from investors. Fazzaco also learned that the Philippine Securities and Exchange Commission announced a ban on Binance in recent days. Richard Teng, who had worked at the Monetary Authority of Singapore, took over CZ's office and became the helmsman of this giant crypto ship amidst the storm.

Teng joined Binance in August 2021 and served as the CEO of the Singapore company. After Binance closed its Singapore business in early 2022, Teng moved to the Middle East and North Africa (MENA), European Union and Asian markets. In the view of the new CEO, Binance is in a development stage, growing from a less rule-abiding technology innovation company to a traditional financial institution.

"Binance made some mistakes in the stage of rapid growth, but the company also learned from them." Teng said in a recent exclusive interview with Fortune, admitting CZ's guilty plea while seemingly believing that this incident would not affect Binance's future development.

Justin Sun: CZ, You Took the Industry to Unprecedented Heights

In Fazzaco's article, From "Huobi" to "HTX": The Story Behind The Exchange's Rebranding Hassle​, we talked about Justin Sun, who "does not have a good reputation in the crypto community. He has always had a habit of playing on the edge and causing controversy to attract attention." After CZ's resignation, Sun also posted a message on social media in the first time to "catch the attention": "CZ, I've known you for nearly ten years...Over the past six years, you founded Binance, taking the industry to unprecedented heights."

Many joked after they saw what Sun posted that "now that CZ is waiting for the court's verdict next year, guess Huobi HTX and Justin should be next", and some even sarcastically said, "After the FTX and Celsius events, it seems that the all crypto bigwigs will end up in prison".

Will Binance Weather Through the Storm?

CZ's "guilty and gone" incident is likely the biggest blow Binance has ever suffered. However, from the current situation, Binance seems to be relatively stable in this regulatory crisis. First, there was the new CEO Richard Teng, who has worked for a regulator previously, and then there was the launch of the 50x leveraged meme coin by the exchange. However, the crypto community is divided on Binance's future direction.

Optimists believe that the exchange will still maintain or even strengthen its market position in the crypto market, because this whole incident actually solved the legal problems they faced, and the market should restore confidence in them, and the funds that had withdrawn due to security purposes will also return. In addition, appointing Teng, a former MAS executive, as the new CEO means that Binance is determined to strengthen compliance. CZ's resignation is, too, an act to separate Binance from his personal affairs.

But there are people who think that although this incident is not a fatal blow, it will still have a negative impact in the long run. Some people point out that Binance's market share will start to see a watershed this year, but it will still be among the top three cryptocurrency exchanges in the foreseeable next three years.