November 22, 2023
Yesterday, the United States Department of Justice made a public announcement of significant importance, unveiling a deal with Binance, one of the world's largest cryptocurrency exchanges. According to the disclosed information, Changpeng Zhao (CZ), the CEO of Binance, was required to step down from his position and face a conviction related to violations of anti-money laundering laws and U.S. securities legislation.
The official statement conveyed that the renowned CEO of Binance had been formally convicted of breaching anti-money laundering laws and U.S. securities legislation. The charges emphasized that the former CEO was aware of violating U.S. securities regulations and failed to meet the requirements for protection against money laundering. The actions involved conspiracy, suggesting that the company was actively engaged in illicit plans or criminal activities in collaboration with other parties.
The violation of U.S. securities laws and the failure to comply with legal requirements for customer identification, anti-money laundering, and anti-terrorism prompted the United States government to assert that Binance had allowed organizations such as ISIS, Al Qaeda, and Hamas to conduct transactions on its platform.
However, the U.S. government proposed an agreement that was accepted by the Binance exchange. Under the terms of the deal, the charges would be dropped, concluding the criminal proceedings, in exchange for a payment of $4.3 billion by Binance. Additionally, Changpeng Zhao (CZ), CEO of Binance, would resign, admitting guilt for violating anti-money laundering laws.
Subsequently, former Binance CEO Changpeng Zhao (CZ) was sentenced to 18 months in prison as part of a judicial agreement with the U.S. government but was released from custody upon posting a $175 million bail.
The news triggered panic in the financial market, resulting in the devaluation of Bitcoin, dropping below 36,000, and a significant depreciation of Binance's token. A wave of withdrawals hit the exchange, with over $1 billion being withdrawn within hours of the news breaking. After confirmation that the CEO had posted bail and the situation appeared to be resolved, panic subsided, and the market returned to normalcy.