Changpeng Zhao, the founder of Binance, pleaded guilty in a Seattle court related to money laundering charges and stepped down from the position of CEO of the world’s largest cryptocurrency exchange.
“Today, I resign as the CEO of Binance” Changpeng Zhao (CZ) wrote on X. He believes that “Binance is no longer a child” and it is time for it to walk and run on its own.
Earlier on the same day, CZ appeared in a Seattle court and pleaded guilty to “failure to comply with anti-money laundering regulations” and violating the penalties set by the U.S. Department of Justice (DOJ). Additionally, Binance has settled charges with the DOJ and the Commodity Futures Trading Commission (CFTC); the Financial Crimes Enforcement Network (FinCEN), and the Office of Foreign Assets Control (OFAC) in the U.S. The exchange must provide government regulators access to Binance’s books and records for a 5-year monitoring period.
At the end of March, Binance and CZ were under investigation by the CFTC for alleged violations of eight provisions in the U.S. Commodity Exchange Act, including laws requiring “prevention and detection of money laundering and terrorist financing activities.” At that time, according to Bloomberg, this was the largest legal action by a U.S. regulatory agency against Binance to date. CNBC estimates that this could disrupt Binance’s operations but is just the beginning of a series of actions to control the world’s largest cryptocurrency exchange.
It is rumored that Binance is also planning to plead guilty to criminal charges and agrees to pay a total of 4.3 billion USD, including the amount to settle the civil allegations brought by regulatory authorities.
~> The agreement will finish the ongoing investigations into Binance ~> Binance would be survive if the court accepts payment penalty.
This indicates, CZ is trying to save his money and Crypto Exchange by accepts stepping down and paying penalty.
If Binance fails to comply with AML regulations and is found engaged in money laundering activities, it may face various consequences, including hefty fines, loss of operating licenses, and even the possibility of closure.
Not only AML problem but Binance has a big trouble with CTF.
According to a Treasury Department press release, the crypto exchange failed to implement safety programs aimed at preventing suspicious transactions with groups including Hamas and the Palestinian Islamic Jihad, as well as Al Qaeda and the Islamic State of Iraq and Syria (ISIS).
Countering the Financing of Terrorism (CTF) poses a more severe threat than AML, potentially leading to an international lockdown on both bank transactions and the business operations of Binance.
The proposed USD 4-5 billion may not be sufficient to avert the impending crisis.
I think this event only affects to the market in the short term because we are heading to the bull run in 2024. The next bull will be driven by the companies in Wall Streets
If the whole world agrees to implement blockchain for creating an official cryptocurrency, money laundering activities will no longer have a place.
Public cryptocurrencies are transparent and easily traceable globally, while cash requires more complex cross-border verification processes that take more time.
CTF or Countering the Financing of Terrorism is a more serious trouble than AML which could trigger a international locked down in both bank transactions and business operation of Binance.
USD 4~5 billions is simply not enough to stop that big problem of CTF.
