22 Nov 2023 Samantha McLauren
Binance CEO Steps Down Amid Money Laudering Charges; Is Binance Doomed?
In a massive $4.3 billion settlement with the Department of Justice (DOJ) and the Commodities Futures Trading Commission (CFTC), Changpeng "CZ" Zhao is resigning as CEO of Binance. In July 2017, he established the cryptocurrency exchange, which resulted in a dramatic transformation in the cryptocurrency market.
Charges of money laundering for Zhao?
As part of the settlement, Zhao will enter a guilty plea to the DOJ's accusations of money laundering. The plea hearing is set to take place in Seattle federal court. It emphasizes how serious the charges are against one of the most well-known members of the crypto community.
The claims of the SEC
Earlier in June, Binance and CZ were charged by the Securities and Exchange Commission (SEC). They were charged by the regulator with deceiving investors and functioning as an unlicensed exchange. The vast network of purported deceit, conflicts of interest, lack of disclosure, and deliberate legal avoidance were emphasized by SEC Chair Gary Gensler. But this deal does not involve the SEC.
$4.3 billion settlement after a long investigation
According to Todayq News, Binance and the Justice Department are about to reach a significant $4 billion settlement. It will bring past inquiries that go back to least 2018 to an end. Remarkably, Max Baucus, a former US senator and ambassador to China, will lead Binance's Global Advisory Board, which the company announced last September. Prominent individuals such as Bruno Bézardz and David Plouffe were also on the board.
It was founded during a period of increasing legal challenges. The $4 billion settlement and Changpeng Zhao's resignation now mark a turning point for Binance.
The future of Binance
In the midst of rumors that Binance was withdrawing cryptocurrency holdings valued at close to $1 billion, the company's new CEO, Richard Teng, went on X to reassure the user base that the company's fundamentals are "VERY strong". In reaction to a tweet that implied Binance was able to settle with the US DOJ for an astounding $4.3 billion without having to liquidate any assets, he made his remarks.
In terms of trading volume, Binance is without a doubt the biggest cryptocurrency exchange in the world right now. When FTX collapsed in February 2023, Binance was at the top of the centralized crypto exchange market, controlling an astounding 66 percent of all trading activity worldwide.
But by October, its share of the market had dropped to just 40%. In terms of transaction volume, Binance remains the biggest exchange worldwide even with this dip. It's interesting to note that the CFTC chair had expressed concern about the likelihood of a crisis similar to FTX just six days prior, and the recent developments with Binance seem concerning.
The Department of Justice (DOJ) and U.S. regulatory authorities attempting to control the cryptocurrency market may have a historic case in which Binance, a significant player, has been approached about a settlement rather than going to trial.
Concerns regarding the large number of users and the important role Binance plays in the cryptocurrency world are the driving forces for this decision. Legal experts speculate that by choosing a deferred prosecution deal, the DOJ is probably assessing the possible consequences, taking into account the wide-ranging effects on innocent parties including consumers, employees, and shareholders.
Everyone agrees that Binance has reached a tipping point where a collapse might have far-reaching effects due to its enormous influence.
BNB dips hard, can it recover?
As of this writing, BNB is trading at $236, down 9.2% from the previous day. The asset's 24-hour trading volume increased to $2.55 billion, a 60% increase. Based on data, BNB holds the fourth-largest market capitalization among cryptocurrencies, valued at $35.8 billion.
As stated in an article by Santiment, Binance CEO Changpeng Zhao's announcement to depart the exchange as part of a deal with the U.S. Department of Justice caused BNB's social dominance to soar.
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