Crypto Market Plummets as Binance Founder ‘CZ’ Steps Down

Changpeng Zhao, better known as “CZ,” the founder of Binance, is stepping down as CEO.

This news is part of a $4 billion settlement with the U.S. Department of Justice (DOJ). This decision has sparked intense reactions from investors and industry observers, manifesting in significant market fluctuations.

The total market capitalization of the crypto market, sitting at $1.448 trillion, saw a downturn of 2.3% in the past 24 hours. This slip in value can be directly linked to the uncertainty injected into the market by CZ’s departure. 

The settlement, which also involves the Commodities Futures Trading Commission (CFTC), does not include the Securities and Exchange Commission (SEC). However, the SEC previously filed charges against Binance and Zhao in June, alleging the operation of an unregistered exchange and misrepresentation to investors.

Binance’s legal challenges and leadership changes

Zhao will plead guilty to anti-money laundering charges as part of the settlement, a plea he is expected to submit in a federal court in Seattle. The CFTC had accused Binance of offering crypto derivatives to U.S. citizens without appropriate registration.

Amid these legal woes, Binance has attempted to navigate the regulatory landscape by forming a Global Advisory Board featuring notable names such as Max Baucus, former U.S. Senator and Ambassador to China, and David Plouffe, former campaign manager for President Barack Obama.

Price volatility following the announcement

The price of Binance’s native token, BNB, took a nosedive, shedding 6.3% of its value in the last hour following the news. Bitcoin (BTC) currently stands at $37,140, experiencing a slight surge and a downturn of 1.22% in the past day. Ethereum (ETH), the second-largest cryptocurrency by market cap, has also decreased to $2,002, marking a 1.9% drop. 

Source: Coin 360

Other notable cryptocurrencies have shown mixed performance: Ripple (XRP) is valued at $0.600329, while smaller cap cryptocurrencies like Dogecoin (DOGE) and Polkadot (DOT) are trading at $0.074974 and $5.0417, respectively, with both witnessing downward adjustments. The market reflects bearish and bullish trends among various assets, representing gains and losses across the board.

A new chapter

Changpeng Zhao has passed the torch of leadership to Richard Teng, the former Global Head of Regional Markets at Binance. Zhao announced the appointment on social media, emphasizing Teng’s extensive experience spanning three decades in financial services and regulation.

Teng, with his background as the CEO of the Financial Services Regulatory Authority at Abu Dhabi Global Market, Chief Regulatory Officer of the Singapore Exchange, and a previous stint with the Monetary Authority of Singapore, is “poised to steer Binance through an era that promises heightened security, transparency, compliance, and growth”, according to Zhao. Changpeng’s continued involvement as a shareholder and consultant ensures that his expertise will still inform the company’s trajectory, aligning with U.S. agency resolutions.

As for Zhao, his immediate plan is to take a well-earned break, having not stepped away from the helm in over six years. Post respite, his eyes are set on passive investments in burgeoning sectors like blockchain, Web3, DeFi, AI, and biotech, reflecting a shift from active leadership to a supporting role in innovation. Additionally, he’s open to privately mentoring a select few entrepreneurs, sharing his wealth of knowledge and, perhaps, more importantly, his insights on the pitfalls to avoid.

Image credits: Shutterstock, CC images, Midjourney, Unsplash.