Binance’s Top Executive Team to ‘Remain Intact,’ New CEO Says

Francine Lacqua and Emily Nicolle, Bloomberg News

, Source: Kaiko

(Bloomberg) -- Binance Holdings Ltd.’s new chief executive officer indicated he’s in no rush to reshape the company’s top leadership team, after a $4.3 billion settlement with the US Department of Justice that forced its co-founder Changpeng “CZ” Zhao to step down.

“Our core team remains intact,” Richard Teng, the former civil servant who took over from Zhao as the crypto exchange’s CEO last week, said in a Bloomberg TV interview when asked about Zhao’s partner and senior Binance executive Yi He’s role at the company. “That’s very important.”

Teng, 53, succeeded Zhao after the billionaire was required to relinquish control as part of the Nov. 21 settlement, in which Binance and its co-founder admitted to anti-money laundering and sanctions violations. As part of the deal with the DOJ, Zhao is barred from having any formal involvement with Binance for the next three years — and is expected to spend no more than 18 months in prison.

Zhao, who has children together with Yi He, remains a major Binance shareholder. Binance has suffered a string of senior departures this year, including the head of its Asia-Pacific business and its chief strategy officer.

Read: New Binance CEO Teng’s First Job Is to Avert Customer Exodus

Binance’s settlement capped a year in which a history of poor internal controls and crime finally caught up with the crypto industry, following the messy implosion of the FTX exchange last November. FTX founder Sam Bankman-Fried was found guilty of a massive fraud last month and could face decades in prison. Authorities have targeted a slew of other crypto entrepreneurs, from Terraform Labs’s Do Kwon to Celsius Network’s Alex Mashinsky.

As he moves to put Binance’s regulatory troubles behind it, Teng is under pressure to pick a formal headquarters for his company as well as a board of directors. In the interview, the former head of the Abu Dhabi Global Market declined to elaborate on those processes, saying only that Binance will make announcements in due time.

Unlike rival Coinbase Global Inc., Binance isn’t publicly traded and doesn’t disclose numbers for revenues and profits. It likely makes at least $5.1 billion in annual gross revenue from trading fees, according to an estimate from asset manager 21.Co. The various zero-fee promotions exchanges like Binance offer to stimulate trading makes it difficult to estimate its financials, alongside the many other businesses where it earns money like venture capital investment and payments.

Teng said in the interview that “revenues and profit remain robust,” without giving details. He also declined to say when it will select a financial auditor. “Our capital structure is debt free,” Teng said.

Binance still has a separate lawsuit from the US Securities and Exchange Commission to contend with. Under the terms of its deal with the DOJ, the company must submit reports to the US government and face checks from an independent compliance monitor for three years. Zhao stepped down as chairman of Binance’s US exchange on Tuesday, though he still retains an economic interest in that entity too.

--With assistance from Sidhartha Shukla.