The native token of crypto exchange Binance, known as BNB, plummeted Tuesday on news the Justice Department is filing criminal charges against the company and its CEO, Changpeng “CZ” Zhao.
Binance’s cryptocurrency, BNB, fell as much as 9% on the initial news, before narrowing the drop to around 5% by mid-afternoon. The initial report came from the Wall Street Journal, which said Zhao would soon step down as CEO of the exchange and plead guilty to criminal U.S. anti-money-laundering requirements. Court documents have since confirmed this.
Binance will also plead guilty to a criminal charge and pay $4.3 billion in fines, which will allow it to settle civil charges brought against it by regulators. Zhao himself will pay $50 million
As BNB fell, so did the broader crypto market, with the global cryptocurrency market cap dropping 3.5% over the past day to $1.43 trillion, according to CoinGecko. Bitcoin, the most popular cryptocurrency, fell just under 2% following news of the charges against Zhao and Binance.
Binance initially sold millions of BNB in 2019, and currently allows customers to use the tokens for a discount on trading. The company and Zhao still hold billions of dollars worth of the coin.
The Justice Department is scheduled to hold a press conference at 3 p.m. Eastern Time on the criminal charges. The lawsuit follows previous lawsuits by the Securities and Exchange Commission and the Commodity Futures Trading Commission.