Changpeng Zhao’s Influence on Binance Faces Growing Controversy Amid Official Ban

• Despite stepping down as Binance CEO in 2023 following a guilty plea for violating U.S. laws, Changpeng Zhao continues to have influence on the exchange.
• While some applaud CZ’s contributions to the crypto industry, others argue that his influence remains reckless and problematic.

Binance, the world’s largest cryptocurrency exchange, is at the center of growing controversy as former CEO Changpeng Zhao (CZ) continues to wield influence despite officially stepping down. His departure followed a guilty plea in November 2023 for violating U.S. Anti-Money Laundering laws, which led to a four-month prison sentence.

Richard Teng took over as CEO, ushering in a new era for Binance. Under Teng’s leadership, Binance has experienced rapid growth, attracting $21.6 billion in user deposits in 2024 alone and surpassing 250 million registered users by the end of the year.

Despite stepping down, CZ remains influential in Binance’s developments. As we covered in our latest report, he recently denied rumors that Binance is seeking a buyer but acknowledged that the company may consider selling a minority stake in the future in an X post on Feb. 17, with CZ holding a significant stake in the company. He dismissed speculation about a potential sale, calling it misinformation from a competitor in Asia.

On February 16, CZ highlighted data from DeFiLlama, showcasing BSC’s (BNB Smart Chain) strong market performance. He pointed out that BNB Chain’s 24-hour trading volume had surpassed $3.73 billion, significantly outpacing Solana’s $2.66 billion in the same period.

DeFi researcher Leviathan accused him of fueling speculative frenzies and contributing to the rise of fraudulent meme coins.“Congrats CZ, you drove hundreds of millions of volumes on BNB as thousands created fake meme coins rinsing and rugging for millions,” Leviathan remarked.

These allegations raise concerns over CZ’s continued sway over Binance’s ecosystem and his broader influence in the industry.

Global Regulatory Scrutiny on Binance

Binance is facing increasing regulatory pressure worldwide as authorities intensify scrutiny over its operations. As noted in our earlier post regulators in France are investigating the exchange over alleged unlicensed activities and money laundering. Although Binance obtained regulatory approval in 2022, its past financial transactions and market practices are now under review. Similarly, in Spain, Binance is under court investigation for alleged misappropriation of funds dating back to 2021. A businessman known as “JL” claims that Binance withheld his €67,550 investment, prompting legal action.

Despite ongoing regulatory challenges, Binance continues to expand its services and offerings.

The exchange recently integrated Dogecoin (DOGE), Litecoin (LTC), and ChainGPT (CGPT) into its lending system, allowing users to use DOGE and LTC as collateral on the Fixed Rate Loan platform. Additionally, on Feb. 10, the U.S. Securities and Exchange Commission (SEC) and Binance filed a joint motion to pause their legal case for 60 days, a request that was granted by the court.