What Will a Post-CZ Binance Look Like?

After Binance CEO Changpeng Zhao (CZ) agreed to plead guilty and step down as CEO of the world’s largest cryptocurrency exchange, the crypto world fiercely debated the future of the company he founded in 2017.

Cults of personality are not new to the tech or cryptocurrency industries, where figures like SpaceX CEO Elon Musk have amassed scores of followers and can move markets with a single tweet. For his part, CZ shaped much of the online conversation around crypto, including creating the shorthand “4” for alleged misinformation.

Following a years-long investigation led by the U.S. Department of Justice on Tuesday, CZ agreed to pay $4.3 billion in fines and plead guilty to money laundering charges.

“CZ stepping down from Binance is a strong signal of the maturity of the crypto market, where, in contrast to the wild-west stereotype, those who operate outside certain parameters will now be held accountable,” Greg Moritz, COO of the Atlanta-based crypto hedge fund AltTab Capital, told Decrypt. “Even more importantly, a succession at Binance would show that the largest crypto operations have a solid continuity plan and are not dependent on any one person.”

“CZ may have been the person to grow Binance to the behemoth that it is, but Binance can thrive even more under new leadership,” Moritz added.

But while CZ is stepping down and being replaced by new CEO Richard Teng, Amberdata Director of Research Chris Martin does not see the founder going very far.

“I think overall this is positive for Binance in the long run, and the industry as a whole,” Martin said. “The settlement with DOJ paves a path forward for Binance to eventually rebuild in the United States, and the settlement with the CFTC shows that Binance is playing nicely with the commodities regulator.”

Remaining active in the U.S. may be easier said than done, as one of the stipulations of the DOJ’s case against Binance and CZ was the exchange was ordered to exit the United States completely.

“As for CZ, my bet is he'll still be involved in much of the day-to-day. He did not relinquish ownership of the exchange, so he'll continue to be a major presence—my bet is that he'll be an even bigger presence on X (Twitter) than before,” Martin predicted.

A silver lining in the ongoing case with the SEC, Martin said, is the likelihood that Binance would join Coinbase and Kraken in pushing back against what has been called heavy-handed regulation by enforcement.

With a new CEO named, what comes next?

Head of Private Clients at Swan Bitcoin, Steven Lubka, said the next goal will be bringing the crypto giant under compliance, which may lead to customers heading for the door.

“The DOJ will have visibility into their books for the next 2-3 years and will bring the firm into compliance if there are things not in line,” Lubka said. “Binance will likely continue to operate in both the short and long term. However, protocols, compliance procedures, and assets may change.

“I think a material percentage of Binance users liked the platform for lax compliance,” he concluded.

Edited by Ryan Ozawa.