During a meeting for VIP clients of the Binance crypto exchange in Singapore, guests learned insider information related to problems with the American authorities.
Among the guests was Richard Teng, the future successor to Binance founder Changpeng Zhao, according to several participants who asked not to be identified discussing the private meeting, Bloomberg reported. At the meeting, Binance representatives were directly asked about the details of the company’s legal problems.
The assembled traders pressed Binance officials on how much the firm would pay to the U.S. Department of Justice and other U.S. authorities to settle the dispute, including raising the possibility of a $4 billion fine. After speaking with company representatives present at the dinner, some VIP guests were convinced that the firm would pay this amount—an amount that Binance could easily afford.
A Binance spokesperson said the description of the event was inaccurate, but declined to specify which aspects were incorrect.
In addition, insiders claim that Zhao has spoken about his readiness to step down during regular calls with the platform’s management since last May.
“Since at least May, Zhao had been mentioning on regular Binance leadership calls that he was preparing to step down, according to four people familiar with the conversations, who asked not to be identified discussing internal communications.”
Additionally, a possible deal struck earlier in 2023 with the U.S. Department of Justice could have been better for Zhao fell through after some officials insisted that he personally face harsher punishment. As months passed, the department insisted on tougher penalties.
Zhao faces a maximum penalty of 10 years in prison and a fine of up to $500,000, plus any profits he made from the alleged crimes. His sentencing is scheduled for February. His plea agreement with the U.S. government includes a waiver of the right to appeal as long as his sentence does not exceed 18 months.
The now former CEO resigned as head of the Binance exchange and also pleaded guilty to violating the Bank Secrecy Act. The exchange itself faces three criminal charges, including operating an unlicensed financial business, conspiracy, and violating the Emergency Financial Powers Act.
Zhao was also banned from leaving the United States. He will be barred from leaving the United States until a Seattle court considers whether he should remain in the country until his sentencing, which is scheduled for Feb. 23, 2024.