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RRUPDATES📍: Guilty CZ Walks Away From Darling Child Binance🚶♂️
In a stunning turn of events for the global cryptocurrency industry, Changpeng Zhao, the founder of Binance, the world's largest cryptocurrency exchange, has agreed to plead guilty to money laundering violations.
The R Roundup
November 21, 2023
RRUPDATES📍: Guilty CZ Walks Away From Darling Child Binance🚶♂️
In a stunning turn of events for the global cryptocurrency industry, Changpeng Zhao, the founder of Binance, the world's largest cryptocurrency exchange, has agreed to plead guilty to money laundering violations.
According to court documents filed in federal court in Seattle on November 20, both Binance and Mr. Zhao will enter guilty pleas. Binance is set to pay a remarkable $4.3 billion in fines and restitution. In addition, Mr. Zhao will personally contribute $50 million to settle the charges and will step down from his position as chief executive of the company.
Binance Founder Changpeng Zhao Agrees to Step Down, Plead Guilty -- WSJ: BBG
— Tree News (@News_Of_Alpha)
Nov 21, 2023
As part of the plea deal, Binance has agreed to the appointment of a monitor, and Mr. Zhao is prohibited from any involvement in Binance’s business until three years after the monitor assumes the role.
The court papers reveal that federal prosecutors filed criminal charging documents against both Binance and Mr. Zhao on November 14. However, Mr. Zhao's legal representatives from Latham & Watkins have not issued a statement at the time of reporting.
The charges outline a broad effort by Mr. Zhao and senior Binance employees to circumvent laws prohibiting transactions with individuals subject to American economic sanctions and to ensure proper registration of U.S.-based businesses with regulators. The court documents highlight instances where customers from sanctioned countries such as Iran, Cuba, and Syria gained access to the Binance platform.
Notably, Binance conducted business with U.S.-based firms on its Binance.com platform, despite regulations prohibiting U.S. customers. This violated anti-money laundering laws, with a separate platform, Binance.US, designated for handling U.S. business. Mr. Zhao and other Binance employees opted for the main cryptocurrency exchange to manage significant U.S. customers.
The filings reference Mr. Zhao's personal efforts to conceal Binance’s dealings with U.S. VIP customers, instructing employees to use untraceable communication methods to avoid scrutiny from U.S. supervision agencies.
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For the cryptocurrency industry, this marks a significant moment, considering Binance's global dominance and Mr. Zhao's influential role. Binance has historically processed a substantial share of digital currency trades, solidifying its position as a crucial intermediary in the crypto world. Mr. Zhao, often regarded as the wealthiest figure in crypto, has maintained a low profile, amassing over 8.5 million followers on the platform formerly known as Twitter.
Tuesday's developments echo a broader trend of legal actions against crypto executives, including the recent conviction of Sam Bankman-Fried, the entrepreneur behind the collapsed FTX crypto exchange. Federal authorities have pursued criminal charges against various crypto executives, while regulatory bodies like the Securities and Exchange Commission have filed lawsuits against major industry players, including Coinbase and Kraken.
As this story unfolds, stay tuned for more RRUPDATES on this groundbreaking development.
As a reminder, this is not a trading signal or investment advice; it is an opinion, and each trader/investor should know and understand the risks of trading cryptocurrencies.
This should not be regarded as financial advice; feel free to familiarise yourself with our NFA disclaimer.
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