Binance and CEO 'CZ' Anticipated to Plead Guilty in Unsealed U.S. Indictments; $4 Billion Settlement Looms
Summary:
The US federal court has unsealed the indictments against Binance, the world's largest cryptocurrency exchange, and its CEO Changpeng "CZ" Zhao, with the United States government anticipating guilty pleas from both. They are charged with violating the Bank Secrecy Act due to insufficient anti-money laundering measures on the Binance platform. Court proceedings will unfold with simultaneous criminal and major civil resolutions anticipated from multiple departments. There's expectation that Binance will pay over $4 billion as part of the settlement, but it is uncertain whether this will affect Binance’s ongoing case with the U.S. Securities and Exchange Commission (SEC).
On November 14, the indictments were unsealed that charged both Binance, the cryptocurrency exchange, and its CEO, Changpeng "CZ" Zhao, as detailed by a US federal court. The United States government expects both parties to plead guilty. These filings were made in the U.S. District Court for the Western District of Washington in Seattle, where the U.S. government noted that sealed indictments were required because any prospective pleas or regulatory settlements could seriously impact both the company and the worldwide cryptocurrency markets. The charges against CZ include a single felony for failing to implement a sufficient anti-money laundering program on the Binance platform, a violation of the Bank Secrecy Act.
When the plea hearings unfold, the court expects simultaneous announcement of criminal resolutions involving CZ and Binance, along with major civil resolutions spearheaded by the U.S. Department of the Treasury Office of Foreign Assets Control (OFAC), the U.S. Department of the Treasury Financial Crimes Enforcement Network (FinCEN), and the Commodity Futures Trading Commission (CFTC). The November 14 document also takes note that despite Binance being a privately-held company, it remains the world's largest cryptocurrency exchange, and any news concerning the legal predicaments of CZ and Binance will likely provoke significant fluctuations in the trading of various cryptocurrencies. Given the known volatility of cryptocurrency markets, merely filing a federal criminal case against such influential figures as CZ and Binance could dramatically impact the market, as the court acknowledged in the document.
The government invoked a comparison with the sharp volatility in the FTX Token (FTT) price when the cryptocurrency exchange collapsed in November 2022. That incident saw former CEO Sam "SBF" Bankman-Fried indicted on federal fraud charges, followed by a subsequent conviction on seven counts, with his sentencing awaited in March 2024.
Court records state that on the morning of November 21, lawyers for Binance and CZ will conduct separate hearings to negotiate pleas and discuss possible detention. Motions have also been filed concerning the conditional release of Binance's CEO as he awaits trial, but as of publication time, the details of these motions remained sealed.
Observers predict that settlement announcements for numerous criminal and civil cases filed against Binance and CZ in the United States will come at 8:00 pm UTC on November 21. These announcements will be part of a combined statement from the Justice Department, CFTC, and the Department of the Treasury. As reported by several sources, CZ has agreed to plead guilty and Binance is set to pay in excess of $4 billion as part of these settlements. It remains uncertain, however, whether this announcement will touch upon Binance’s ongoing civil case with the U.S. Securities and Exchange Commission (SEC). In June, the SEC filed 13 charges over alleged securities law violations against the crypto exchange Binance.US and its CEO, CZ.
Published At
11/21/2023 7:42:08 PM
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