- Binance founder Changpeng Zhao is permanently banned from managing the company but retains influence as the majority shareholder.
- Zhao holds 90% of Binance shares, granting him voting rights on key decisions despite being banned from day-to-day operations.
- Binance is enhancing compliance efforts, spending $200M in 2024 and planning to hire 500 more employees by 2025 despite regulatory challenges.
Binance CEO Richard Teng has verified that Changpeng Zhao (CZ), the founder of the exchange, is permanently prohibited from overseeing or running the business.Â
JUST IN: BINANCE CEO RICHARD TENG REVEALS THAT CHANGPENG ZHAO CAN NEVER LEAD BINANCE AGAIN BUT WILL RETAIN INFLUENCE AS MAJORITY SHAREHOLDER
— BSCN Headlines (@BSCNheadlines) September 6, 2024
This choice comes after CZ admitted guilt for facilitating money laundering and breaking U.S. sanctions. Consequently, the U.S. Department of Justice (DOJ) has imposed a permanent prohibition on his participation in Binance’s daily activities.
Having a controlling stake keeps CZ’s power intact
In spite of the management’s restrictions, CZ still holds a 90% ownership stake in Binance, making him the company’s biggest shareholder. This grants him substantial power via his voting rights over important business choices. As per Teng, CZ has the authority to select directors and potentially remove the CEO, guaranteeing his influence on the company’s direction.
Jail Time
At the moment, CZ is incarcerated for four months and is anticipated to be released in late September 2024. Following his release, he will finish the rest of his sentence in a transitional residence before regaining full liberty. Nevertheless, the prohibition enforced by management is ongoing as a component of his agreement with the DOJ.
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Binance boosts compliance measures
In recent years, Binance has experienced growing regulatory scrutiny, leading to a fine of $4.3 billion in 2023. As a reaction, the company has greatly improved its efforts to follow regulations, supposedly investing more than $200 million in 2024 alone. In addition to that, Binance has brought in two external monitors in order to guarantee compliance with worldwide financial regulations and improve supervision.
Binance’s Plans for the FutureÂ
Even with the challenges from regulatory inquiries and penalties, Binance is still able to remain profitable. CEO Richard Teng affirmed that the company plans to obtain additional licenses worldwide and increase its staff by recruiting 500 new employees by 2025, emphasizing Binance’s dedication to expansion and adherence to regulations.
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