Binance Pays Billions in Fine, Kraken Faces SEC, Sam Bankman-Fried Imprisoned, BlackRock Nears Bitcoin ETF
Summary:
The world's largest crypto exchange, Binance, and its CEO, Changpeng Zhao, have agreed to pay a $4.3 billion fine and admit to violating U.S. Anti-Money Laundering laws. Meanwhile, Kraken is embroiled in another legal spat with the SEC, accused of illicitly enabling crypto trading and co-mingling client and corporate assets. Sam Bankman-Fried, the founder of FTX, remains in custody, unable to secure bail. BlackRock and Nasdaq have been discussing with the SEC about a rule permitting the listing of a spot Bitcoin ETF. Tether and Bitfinex have withdrawn their initial opposition to a Freedom of Information Law request filed by several media outlets.
In the recent conclusion of a legal feud between the world's leading cryptocurrency exchange and US authorities, a plea agreement was reached. Admitting they had contravened American anti-money laundering (AML) regulations were Binance and Changpeng Zhao, also known as CZ, who have consented to pay a fine of $4.3 billion. Zhao, as part of the agreement, will step down as Binance CEO. Richard Teng, the ex-head of international markets outside America for Binance, is slated to fill the CEO role. Charles Hoskinson, founder of Cardano, descirbed this as "the end of an era". He underscored that business founders must either obey regulations or create protocols that are beyond regulation. Hoskinson pointed out that the climate spells change and using centralized systems while disregarding regulations will no longer be an option for entrepreneurs. This is due to "the weaponized financial regime of the United States" which won't permit market entry for "America's enemies".
Meanwhile, another crypto exchange heavyweight, Kraken, has become engaged in another legal squabble with the US Securities and Exchange Commission (SEC). The SEC alleged in a case filed in a federal court in San Francisco that, since 2018, Kraken has run a system that illegally enabled cryptocurrency trading. The SEC also accused Kraken of co-mingling up to $33 billion of its own and its clients' assets due to its business practices and "lacking" internal controls, resulting in a "significant risk" for their customers. Jesse Powell, Kraken founder, called this an “attack on America” and labled the SEC as “America’s greatest decel.” He even urged other corporations to leave the country.
Regarding Sam Bankman-Fried, convicted swindler and founder of FTX, he was unable to sway a US appeals court to grant him liberty while his legal team objects to his conviction, and will remain incarcerated. Previous tampering attempts with witnesses on his part while on pretrial release were a major factor leading to his bail denial by the US Court of Appeals for the Second Circuit. “The defendant's other arguments have been examined and found to be lacking in merit,” the court maintained. The legal counsel for Bankman-Fried also argued that the lower court neglected to examine a less extreme alternative to detention.
BlackRock representatives and the Nasdaq held talks with the SEC on a pending rule which would permit a spot Bitcoin exchange-traded fund (ETF) to be listed. BlackRock put forth how an in-cash or in-kind redemption model could be implemented by the firm for its iShares Bitcoin Trust.
Lastly, Tether and Bitfinex have taken a step back from their initial opposition to a Freedom of Information Law request filed in New York by notable news outlets. According to a statement shared with Cointelegraph, the issuer of the Tether (USDT) stablecoin and cryptocurrency exchange is dedicated to transparently disclosing information, following CoinDesk’s 2023 FOIL request. Tether and Bitfinex have opted not to challenge the FOIL request by journalists who they blame for “certain behaviors." The FOIL request pertains to a settlement reached between Tether, Bitfinex and the New York Attorney General in February 2021 concerning the supposed co-mingling of client and corporate funds to the tune of $850m.
Published At
11/27/2023 8:00:00 PM
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