The chief of the world’s biggest cryptocurrency exchange Binance, Changpeng Zhao (CZ) on Tuesday stepped down from his position after pleading guilty to breaking U.S. anti-money laundering laws. CZ agreed to pay a substantial $50 million fine, while, the crypto exchange Binance faces a massive $4.3 billion penalty. However, experts found this deal very favorable for both CZ and Binance.
Alleged violations by US watchdogs
According to reports, Binance was facing charges including money laundering violation, conspiracy to conduct an unlicensed money-transmitting business, and violations of US launched sanctions with transactions amounting to around $898 million.
I added that Binance collected around $1.35 billion in trading fees from US based customers. The exchange somehow entered into an agreement with the Financial Crimes Enforcement Network (FinCEN), the Office of Foreign Assets Control (OFAC), and the Commodity Futures Trading Commission (CFTC). However, the watchdogs will be getting $1.8 billion in settlement, while, CZ will be prohibited from operating any business for the next three years.
It is expected that the agreement will give a notable shift to Binance’s trajectory. It is important to note that US agencies have not accused the crypto exchange of misappropriating user funds or engaging in market manipulation.
Can Binance maintain its top spot?
As the concerns over Binance’s future looms, the fine imposed by the authorities turns out to be less severe than the expected amount of $10 billion. This will allow the crypto exchange to maintain its position as a top three exchange in the next 2-3 years.
Experts believe that the plea deal, unlinked to the US Securities and Exchange Commission (SEC), can be considered a favorable result for CZ and Binance. However, the regulatory actions taken against Binance have speeded up since the FTX/SBF trial.
The report highlighted that the experts note that the US agencies have significantly shaped the crypto landscape in 2023 by dismantling crypto-related banks and targeting perceived major actors. The development is moving ahead to prompt other exchanges in order to strengthen compliance programs.
