Binance CEO Changpeng Zhao has stepped down from his position after pleading guilty to violating US anti-money laundering laws as part of a $4.3 billion settlement, per prosecutors on Tuesday.

Part of the deal will have Zhao personally pay $50 million, and has been called by prosecutors one of the largest corporate penalties in US history. This serves as another hit to the crypto industry after the recent conviction of FTX founder Sam Bankman-Fried for fraud. 

Bankman-Fried has been charged with two counts of wire fraud and six counts of conspiracy, including conspiracy to launder money and commit campaign finance violations. If convicted, he may face up to 115 years in prison.

Legal experts claim that Zhao still has his wealth in place and has been allowed to keep his stake in Binance.

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'Confidence in financial strength'

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Prosecutors confirm that Binance will pay $1.81 billion within 15 months, and another $2.51 billion forfeiture.

Vanderbilt University law professor Yesha Yadav commented, "This deal...looks designed to give Binance the chance to live another day, while removing CZ, a figurehead who has been so intrinsically linked to the growth of a business model," she said, adding that Zhao may be able to influence the company, given the retention of his stakes. 

Zhao, who Forbes says is worth $10.2 billion, seems to have "come out of this looking pretty good" given that the US government had to 'entice' him to come to the US, according to Robert Frenchman of Mukasey Frenchman LLP.

"He still has enormous wealth," Frenchman noted, adding, "He isn't likely to spend too much time in a US jail. He retains his ownership stake in Binance, a company that has now resolved some of its biggest legal issues."

Jeffrey Cohen, an assistant professor at Boston College Law School and former federal prosecutor, said, "If you can get a good number for a corporate fine and the cost is that the individual defendants take a slightly lesser penalty, the government makes that calculation".

'Hamas Binance-ing'?

Binance has been under the Justice Department's watch since 2018, a year after its founding, Reuters said last year.

The firm was requested by federal prosecutors at the end of 2020 to provide internal records regarding its anti-money laundering efforts, and communications involving Zhao. Following that request, civil charges against Binance were filed in March by the CFTC, alleging its failure to implement an effective anti-money laundering program to prevent terrorist financing.

Kit Addleman, a partner with Haynes Boone law firm in Texas, said: "The government is beating a drum on the issue of individual accountability", as she noted that the size of the fines display the extent in which the government wants to be involved in the crypto sector - calling the size of the deal "staggering".