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Changpeng Zhao (CZ) will be finishing his four-month stint behind bars in just a matter of weeks but the former Binance CEO will never work for the exchange again.
According to Axios, current Binance CEO Richard Teng revealed that CZ received a lifetime ban from managing or operating the exchange and day-to-day activities.
However, CZ will retain his shareholder rights as the largest shareholder. "As a shareholder, he will be looking at the performance of the company, and if things are not up to what he expects, as an investor, it's always his right to replace, nominate a new board of directors, or a new CEO ... shareholders can also always table a resolution," Teng said.
Vanderbilt University law professor Yesha Yadav said that due to last year's settlement, Binance now has two external compliance monitors overseeing the company’s transaction monitoring and anti-money-laundering measures.
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"The monitor is going to have a big impact in that sense to act as a check and balance to support the board and will have discretion when it comes to CZ's role as a very important shareholder," Yadav said.
"It's going to be very risky for Zhao to try and start to assert himself," Yadav added. "Notwithstanding the leeway that might be involved in the plea deal, it is a tripwire and gives them reason to look at you and [take it as a sign] you are falling back to behavior from the past.
In another Axios interview, Teng said Binance has been "profitable since [its] fifth month" despite the $4.3 billion fine in 2023. "We have gone through different cycles, and we still remain profitable," he said.
Binance has spent $200 million on compliance in 2024 so far, higher than the $158 million spent in 2022 and putting it on track to exceed 2023's $213 million.
"2024 is a landmark year," says Teng. "You have many more regulators coming through and formulating frameworks ... we also just secured a few more licenses this year."
Binance's current headcount is around 5,200. At its peak, the exchange had 8,000 employees. In 2023, Binance laid off 1,000 employees but has since hired 1,000 people and plans to increase its headcount by 500 before 2025.
A few weeks ago, Binance came under fire for restricting access for Palestinian users at the behest of the Israel Defense Forces (IDF).
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Ray Youssef, co-founder of Paxful, has alleged that the global exchange had confiscated the funds, stating on X, “Binance has seized all funds from all Palestinians as per the request of the IDF. They refuse to return the funds. All appeals denied.”
Binance has seized all funds from all Palestinians as per the request of the IDF. They refuse to return the funds. All appeals denied.
— Ray Youssef (@ray_noOnes) August 26, 2024
Your funds are SAFU at @noonesapp tho.
In accordance with the authority delegated to me by the Minister of Defense, according to Section 61(a)… pic.twitter.com/RYlsFmlh2i
Binance denied blocking all funds from Palestinians and claims only those who are involved in illicit activities have had their assets confiscated.
