Another shocking news development for crypto today as Binance agrees to plead guilty to US federal money laundering charges. And that’s not all. CZ agrees to resign as CEO, effective immediately AND the exchange agrees to pay over $4 billion in fines.
Binance & The US Government
Binance has always had a contentious relationship with the US Government. The Feds and many of its agencies have often felt the exchange was, among other things:
- Selling illegal securities
- Laundering money
- Operating illegally
- Using its Malta HQ and offshore status to skirt compliance laws in many countries, not only the US.
And after a multi-year investigation, Binance is settling with the US Government.
WSJ: Binance Founder Changpeng Zhao Agrees to Step Down, Plead Guilty
> A big day ‘4’ CZ.
Excerpt:
The chief executive of Binance, the largest global cryptocurrency exchange, plans to step down and plead guilty to violating criminal U.S. anti-money laundering requirements, in… pic.twitter.com/nPnYmAKVUX
— Ram Ahluwalia, Lumida (@ramahluwalia) November 21, 2023
CZ is expecting to plead guilty to violating Federal Anti-Money Laundering laws in federal court in Seattle this afternoon. That is a criminal charge for him personally. Then the company agreed to settle and pay $4.3 billion in fines.
As of this writing, CZ will maintain his ownership stake in Binance even though he is stepping down as CEO.
The US Government is Keeping Busy
In case you haven’t seen it yet, the US Government and its fine had a hand in the shutdown announcement that Bittrex is shutting down in the coming weeks. That exchange had to cease operations in the US and pay fines earlier this year. And now the Global (non-US) business is shutting down too.
Then add to that Kraken is being sued by the SEC for failing to register and selling illegal securities. That came out late yesterday less than 24 hours ago.
So you can see, the US Government is working hard to make Operation Chokepoint a reality and make things difficult for crypto users and investors in the US.
Reactions on Crypto Twitter
Here are a couple of the more interesting reactions we’ve found to the Binance news. Ryan Selkis who runs crypto data and info site Messari said
Binance derisking is one of the biggest catalysts we could have in crypto. + Crypto is a “real” industry post $4 billion settlement + CZ takes a long-needed Miami vacation a la Arthur + Market rips higher, ETFs approved in Jan + GOP wins 2024 election, crypto laws passed
So Selkis thinks this is good for the market both short-term and long-term as it is a “derisking” event.
Crypto investor Mike Alfred says similarly that this paves the way for an easier ETF approval.
Now that CZ and Binance have been removed from the field, the SEC can approve the spot ETF and Blackrock, Fidelity, Invesco and other large players can take over. This is how the game is played.
— Mike Alfred (@mikealfred) November 21, 2023
The idea here is that this is one less obstacle that crypto has to overcome about this reputation of being “only used by criminals” if exchanges are starting to cooperate with the Government.
So far, no doom and gloom posts on CryptoTwitter……yet. At least not that we’ve seen.
Market Reaction
How is the market reacting?
Well, according to our friends at CoinGecko, Bitcoin is down less than 1% since the news came out and only 1.5% in the last 24 hours. Well within the range of typical volatility. ETH is down a little more at 4% in the last 24 hours. Polygon and Algorand are down the most in the last 24 hours of the top 75 projects at 10% and 11% respectively.
And we know some of you are curious since CZ has always been such a staunch defender of BNB of how BNB is doing. Right now as I am writing this, it’s down 6.1% in the last hour and 6.8% in the last 24 hours. So it could see some further downside action.
And possibly, a couple of alts you like might have some good long-term entry points based on these temporary declines in price. We are definitely watching to see if some bargains present themselves.
At this point, no one knows if this is a disaster or if it helps pave the way for a Bitcoin ETF approval, or maybe even both. But we do know that CZ is and has been one of the biggest ambassadors for crypto and has done a lot to help the industry grow. It’s likely in the coming days that he gets a similar deal to former BitMex founder Arthur Hayes, who is back as one of the industry’s top voices and analysts after his settlement with the US Government.
Time will tell.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence.
Copyright Altcoin Buzz Pte Ltd.
