Daily Crypto, Finance, and Tech News Summary – November 23, 2023

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Welcome, and thank you for being part of the MyZucoins community! Let’s get into an interesting piece of crypto, finance, or tech news to stay ahead.

A person giving uncle sam big bags of money at this desk, no other choice

Binance’s Historic US Gov Settlement, Near-Record $4.3B Fine, CEO CZ Resigns, Marks New Point In Crypto Regulation

Binance Holdings Ltd., led by CEO Changpeng Zhao (commonly known as CZ), admitted guilt in a major legal settlement with the U.S. government.

Facing charges of anti-money laundering, unlicensed money transmitting, and U.S. sanctions violations, Binance agreed to pay $4.3 billion, marking one of the largest corporate settlements in U.S. history.

Zhao himself, under a plea deal, will pay a $50 million fine and resign as CEO.

This settlement concludes a lengthy investigation into the crypto exchange’s activities.

The charges against Binance involved permitting transactions with terrorist groups, including Hamas, which led to a $1.8 billion criminal fine and $2.5 billion forfeiture.

Zhao, potentially facing 10 years in prison, is expected to serve no more than 18 months.

The settlement highlights Binance’s failure to prevent and report transactions linked to terrorist groups like Hamas, Al-Qassam Brigades, Palestinian Islamic Jihad, Al Qaeda, and ISIS.

Binance’s operations included over 1.1 million transactions, totaling more than $898 million, between U.S. and Iranian users, reflecting its disregard for legal and regulatory obligations.

U.S. Attorney General Merrick Garland emphasized Binance’s rise to the top of the crypto exchange world, partly due to these illegal practices.

The hefty fine includes significant payments to various U.S. government agencies, underscoring the severity of the violations.

In response to the legal actions, Binance is to appoint a new CEO, Richard Teng, and enhance its compliance measures.

Zhao, despite stepping down, faces restrictions on his involvement with the company for three years.

The company’s admission of early compliance shortcomings comes without allegations of misappropriation or market manipulation.

The case against Binance highlighted its evasion of U.S. laws, particularly in catering to U.S.-based VIP customers.

This involved tactics to bypass IP address blocking and instructions from Zhao to conceal U.S. connections.

Zhao’s acknowledgment of the importance of U.S. customers to Binance’s growth was evident in internal communications.

Zhao’s court appearance in Seattle saw him released on a $175 million bond, with sentencing delayed by six months.

His plea deal includes limitations on appealing the sentence if it doesn’t exceed 18 months.

The case against Binance reflects a broader regulatory crackdown on the crypto industry, mirroring actions against other key players like the now-imploded FTX crypto exchange and its co-founder, Sam Bankman-Fried.

The ongoing SEC lawsuit against Binance and Zhao remains unresolved, despite the settlement of the CFTC (Commodity Futures Trading Commission) case. Read more here.

More On This Topic:

Honest state of the traditional crypto industry.

BlackRock’s Bitcoin ETF Wall St milestone.

Binance faces UK and US regulatory challenges, halting UK sign-ups and US dollar withdrawals.

World’s biggest crypto exchange, Binance, is melting down.

Risky business – The dangers of many crypto exchanges.

Binance, Bitcoin ETFs And Tether’s Stablecoin? What’s The Connection?

Binance and its CEO, Changpeng Zhao, have recently admitted to several US violations, triggering concern throughout the cryptocurrency industry.

Regular readers of this newsletter will know that something of this magnitude was coming, as we occasionally looked at the decisions of top cryptocurrency exchanges and stablecoin issuers and saw many red flags.

Binance did an amazing job helping to get crypto popular, but this serves as yet another stark wake-up call, highlighting the importance of transparency and adherence to regulations in cryptocurrency dealings.

Although it creates a lot more overhead, avoiding this compliance results in much more serious issues down the road, as highlighted by Binance’s news.

This decision will make a change in behavior for centrally managed crypto exchanges, overall a good and needed area of improvement for the industry.

Compliance is something Zucoin works on thoroughly to achieve, including during their Australian Austrac (anti-money laundering and anti-terrorism funding regulator) audit and ASIC investigation (securities regulator).

This shouldn’t affect Zutopia, Zucoin’s marketplace, either, as these considerations have already been done.

Interestingly, the timing of this settlement is worth more attention.

Many analysts hint at a Bitcoin ETF coming in 2024, possibly sometime in Q1.

US regulators are coming down on top exchanges and stablecoins who don’t play ball, before the Bitcoin ETF is finalized, attempting to clean up the industry’s act if they wish to participate in the US market.

What about the elephant in the room?

Where does this leave Tether, the world’s biggest stablecoin that backstops a lot of crypto transactions?

Recall that stablecoins are often used by cryptocurrency exchanges as an intermediate token between other crypto tokens and fiat currencies.

Tether does more transactions than Bitcoin itself and is constantly steeped in controversy.

How come Tether has yet to come under this kind of scrutiny?

Tether’s had a few fines in the past, but nothing on the scale of the fine that Binance has received.

Is Tether incredibly good at evading bullets, or are they being propped up by a major nation behind the scenes?


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—Rob
MyZucoins

Disclaimer: Of course, this is not advice, financial or otherwise. It’s also important to consider the risks and challenges associated with any potential benefits.