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Remember six weeks ago when a crypto fund told WSJ they’re running “Fire drills” for the incoming Binance meltdown? “Whales” were practicing draining every liquidity drop before you could even move. So, the cat is out of the bag; a crypto crash was expected. Changpeng Zhao’s departure from Binance lowered $BNB by 6%. Bitcoin (BTC) fell more than 2% to $36,400 and ether (ETH) fell more than 3%.
What has happened so far? Binance, a major cryptocurrency exchange, settled with U.S. authorities for $4.3 billion, ending a lengthy investigation. Allegations of AML and sanctions violations prompted this considerable settlement.
Binance CEO Changpeng Zhao is resigning as part of this crucial deal. Was it the right time for the SEC to clean the slate? The experts believe this was a well-timed moment to bring out the Binance news by the SEC / DOJ while equities are set to break out from the bear market downtrend.
The largest Settlement Ever Made by DOJ
The settlement involves substantial fines distributed between regulatory bodies like the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Asset Control (OFAC). These fines specifically address accusations related to breaches of the Bank Secrecy Act and sanctions programs.
Since the SEC has blocked all paths, Binance has no choice but to leave the U.S. market entirely, marking a significant strategic shift. To ensure regulatory compliance, a comprehensive five-year monitoring program will oversee Binance’s adherence to AML and sanctions regulations. This historic settlement, characterized as the largest in the U.S. Treasury Department’s history, reflects the severity of the alleged misconduct.
Today, @USTreasury announced the largest enforcement action in our history against Binance, the world’s largest virtual currency exchange. This action is a result of Binance’s egregious violations of U.S. anti-money laundering and sanctions laws. https://t.co/V4IM0b16H3
— Treasury Department (@USTreasury) November 21, 2023
Binance’s Terror Links?
These charges center on Binance’s alleged assistance of illegal activities by Hamas, ISIS, North Korea, money launderers, and cyber threat actors. Systemic non-compliance with basic regulatory procedures allowed unlawful transactions without due diligence or oversight.
This resolution marks a turning point in crypto exchange regulation. The harsh fines and strict monitoring procedures demonstrate the U.S. government’s commitment to cryptocurrency compliance and financial malfeasance prosecution. This landmark decision emphasizes all U.S. crypto exchanges’ strict AML and sanctions compliance.
A Doomed CEO’s Message…
“Today, I stepped down as CEO of Binance,” Zhao tweeted after the settlement. It was hard to let go emotionally. But I know it’s correct. I must own my faults. This benefits our community, Binance, and me.”
What Next With Binance?
Legal expert Yesha Yadav believes Binance could manage the fallout despite substantial penalties. The recent deal, involving a massive fine and the departure of CEO Changpeng Zhao, seems aimed at enabling Binance to continue while distancing itself from its influential figurehead. Although Zhao stepped down, his retained stake suggests he may still wield influence. Forbes estimates Zhao’s worth at $10.2 billion.