It is a hefty sum to pay but $4.3 billion might be worth it to keep this crypto giant alive. It is better than hearing that another one bites the dust. Many people worldwide use Binance - a beloved crypto exchange. The news late yesterday, that the CEO of Binance, Changpeng Zhao (CZ) pleaded guiilty to charges was disconcerting.
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What are the charges?
According to the court filings
Binance :
knowingly failed to register as a money services business (MSB), willfully violated the Bank Secrecy Act by failing to implement and maintain an effective anti-money (AML) laundering program and willfully caused violations of U.S. economic sanctions issued.
Quite hefty. So what did CZ have to say about his guilty plea?
This is the already famous tweet from CZ.
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This news came as a shock because I am sure we would all love to believe that the Binance had its house in order and was compliant on all fronts.
In Summary
- CZ pleads guilty to violating US anti-money laundering requirements etc.
- CZ made a plea deal and step down as CEO of the company he founded in 2017
- CZ will remain majority shareholder
- The new CEO will be Richard Teng former Global head of Regional Markets
- Binance will pay fines of $4.3 billion. Therefore, Binance will survive.
The easy-to-use exchange is the world largest crypto exchange and its demise would certainly send shock waves through the industry. Most of us love Binance. I found it to be user- friendly and reliable and secure. However unfortunately, since August 17, 2023 Dutch users lost the privilege of using the exchange. The Virtual Asset Service Provider licence was not granted by the Dutch regulators. Therefore, Binance has been having issues with other regulators already. However, the US is a larger market - so any violation there is more impressive.
Impact
It seems as though the news did not have any significant impact on the price of BNB or the cryptomarket. BNB is down 9.5% in the last 24 hours. In my opinion - this shows some resilience and that users are loyal.
The latest news
CZ is released from custody on a $175 million bond.
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The condition as stated in the first bullet point - is that he must return to the U.S. 2 weeks before his February 23, 2024 sentencing otherwise that is also a criminal offence punishable by up to 10 years imprisonment and fines of $250,000.
The third bullet point is about DNA Testing. I do not know whether this is standard but it caught my eyes and is very interesting.
After the sentencing of SBF of the FTX exchange, we now see CZ - another keyplayer leaving the crypto limelight.
Is this a clean up of the crypto space or is there more that does not meet the eyes immediately?
Could this situation be a boost for decentralised exchanges?
What do you think?
I have many questions/opinions and I am sure you do too. We will all have to wait and see what happens.
Posted Using InLeo Alpha