Binance in Turmoil: Top Executives Resign Over CEO’s Handling of Investigations

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Binance, the giant cryptocurrency exchange, is currently embroiled in turmoil as several top executives have resigned this week due to CEO Changpeng Zhao’s handling of regulatory investigations. The departures come at a critical time for Binance, which has been facing intense scrutiny and severed banking relationships globally due to regulatory pressure. 

What happened? And Why it is significant for Binance? 

According to sources, senior figures including general counsel Hon Ng, chief strategy officer Patrick Hillmann, and SVP for Compliance Steven Christie have informed Zhao of their decision to leave the company. Their departures follow the recent exit of Matthew Price, a former IRS agent hired by Binance to oversee global investigations and intelligence.

Notably, the resignations represent a serious blow to Binance, particularly as they come from the legal and compliance units, which have direct interactions with regulators. This could further impact the exchange’s ability to navigate the intense regulatory scrutiny it is currently facing.

Binance’s Response to the Turmoil

Binance has yet to respond to requests for comment on the recent departures. But, in a message to Fortune, Zhao stated that a new general counsel was promoted a month ago, and Chief Compliance Officer Noah Perlman will remain with the company. He also noted that Hillmann’s departure was due to personal reasons. 

Insiders familiar with the situation reveal that the executives chose to resign due to Zhao’s response to an ongoing investigation by the Department of Justice. Reports suggest that the investigation, ongoing for over a year, pertains to alleged attempts by Binance to deceive U.S. regulators, as well as potential money laundering and sanctions violations on the platform.

Implications on Binance

Binance is already facing serious regulatory lawsuits from the Securities and Exchange Commission and the Commodity Futures Trading Commission. Speculation has been rife that the Justice Department may soon file a criminal complaint against both the company and Zhao.

The multiple investigations in the United States, along with scrutiny from authorities in Europe, Australia, and elsewhere, have fueled rumors of Zhao potentially stepping aside to assist Binance in weathering the regulatory storm. Reports in June highlighted Richard Teng, a rising Binance executive, as a potential successor to Zhao. However, thus far, Zhao has given no indication that he is prepared to relinquish his position.

What’s next for Binance? 

Despite the ongoing challenges, Binance remains the largest cryptocurrency exchange globally. However, in recent months, its market share has faced a decline, likely influenced by regulatory pressures and the decision of banks in the United States, Europe, and other regions to sever ties with the company, limiting its access to fiat currency.