Advertisement
BNB Price Plummets Amid Legal Challenges
- Binance, CZ admit to AML sanctions violations charges, CZ resigns.
- The crypto market initially reacts with a sell-off while community comments are mixed.
- Ripple’s Chief Legal Officer hints at SEC absenteeism in all of this.
Binance and CZ Plead Guilty
After an eventful 12 months which saw the collapse of FTX and the crypto trial of a century the industry has just witnessed one of its biggest shocks yet. The largest crypto exchange in the world Binance, has just agreed to pay AU$ 6 billion (US$ 4 billion) in fines to the U.S. Department of Justice (DOJ).
Binance and its founder and former CEO, Changpeng Zhao (CZ) pleaded guilty to the charges of anti-money laundering and US sanctions violations, and CZ resigned from his post.
Crypto Market Reacts
Meanwhile, the crypto market doesn’t take the news lightly, with all major assets taking a nosedive. Not surprisingly, Binance’s own utility token BNB is taking the biggest hit, with a whopping 12.8% dip at the time of writing.
Community Has Its Say Too
The crypto community on X (formerly Crypto Twitter) is taking different lessons from the events thus far. Some, like Scott Melker, known as the ‘Wolf of all Streets’ have stated ‘Things are about to get very real in a few hours,’ hinting at serious headwinds for the market. Others, like Tony Edward from the Thinking Crypto Podcast, believe the settlement removes the bearish sentiment, he thinks a Spot Bitcoin ETF is imminent now.
While some argue that it will be easy for Binance to pay such a huge fine, there have been rumours in the past about the solvency of Binance. CZ has dispelled such assumptions, and only the incoming CEO and his CFO will be able to answer whether funds are SAFU.
Guess what we don’t have? No liquidity issues. All withdrawals (and deposits) are properly handled. All customer funds are #SAFU, and 100% reserved.
Changpeng Zhao (CZ), former Binance CEO SEC’s Absence Noteworthy
Ripple Chief Legal Officer, Stuart Alderoty posted on X, emphasising that the resolution of anti-money laundering violations by Binance is a crucial step to ensure compliance with important laws and safeguards in the crypto industry. He noted also that the DOJ did not accuse Binance of securities law violations or suggest that the assets traded on its platform are securities. Finally, Alderoty couldn’t help but remark on the absence of the SEC in all of this:
The Treasury and CFTC joined the DOJ in the Binance deal. The SEC did not, and was glaringly absent from the stage today. This sends a clear message that the agency – under Gensler – has not only become an outlier globally, but an outlier within its own government.
Stuart Alderoty, Ripple CLO 
Author
Aaron Feuerstein
Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.
