Changpeng Zhao, commonly known as CZ, the co-founder and former CEO of cryptocurrency exchange Binance, expressed regret over his failure to implement sufficient anti-money laundering controls during the early stages of Binance. He is currently facing a criminal charge for this oversight. CZ shared these sentiments in a court document filed on April 23, ahead of his sentencing scheduled for April 30.
"Words cannot explain how deeply I regret my choices that result in me being before the Court," said Changpeng Zhao (CZ). "Rest assured that it will never happen again. Please accept my assurance that this will be my only encounter with the criminal justice system and that going forward I will live my life in a manner that will make everyone proud."
In his letter, CZ extended an apology to those he "let down," including his family, employees, and the wider crypto community. He acknowledged that he should have prioritized stringent anti-money laundering protocols at the inception of Binance but failed to do so. "I wish I could change that part of Binance’s story," said Zhao. He noted that since 2022, Binance has implemented "the most stringent anti-money laundering controls of any non-U.S. exchange." Looking forward, Zhao expressed interest in exploring how blockchain technology can enhance global medical access and continue supporting educational initiatives for young people.
According to a press release from the U.S. Department of Justice (DOJ), Zhao, a Canadian national, pleaded guilty to violating the Bank Secrecy Act by failing to maintain adequate anti-money laundering controls at Binance when it launched in 2017. This plea was part of a resolution with the U.S. government made in November. At that time, Zhao also stepped down from his role as CEO at Binance. The company paid $4.3 billion in fines and agreed to allow an independent compliance monitor for three years to review its compliance protocols.
Binance released a statement on its website acknowledging its responsibility for historical criminal compliance violations and expressed its commitment to learning and growth from this challenging experience. The company emphasized that the DOJ did not allege any misuse of customer funds or market manipulation by Binance. Over the past two years, according to the company's statement, Binance has restructured its leadership team, bringing in leaders with compliance backgrounds to ensure a safer and more secure platform for its users.
Ronghui Gu, an associate professor of computer science at Columbia University, was among the 161 individuals who wrote letters supporting Zhao, as revealed in a court filing. Gu met Zhao while working on a blockchain cybersecurity research project that led to the creation of cybersecurity startup CertiK, which received initial investment from Binance Labs. Gu praised Zhao's commitment to utilizing technology for humanitarian causes and cited Binance Charity's Pink Care program as an example. This initiative, launched by Zhao in 2019, aims to use blockchain technology to improve feminine health in developing countries and has already reached 11,600 women. In light of Binance's resolution with the U.S. government, Gu stated that Zhao "acknowledged his mistakes and his guilt," emphasizing that making mistakes is not shameful but failing to rectify them is. Gu requested leniency for Zhao and expressed confidence that he would continue contributing positively to society.
Zhao was born in China but moved to Canada at a young age after his father was exiled due to his intellectual views, according to Investopedia. Before launching Binance in 2017, he held various roles within the financial sector. The exchange now boasts a daily trading volume of $76 billion and serves 90 million users globally.