Changpeng Zhao to Resign as Binance CEO following Justice Deal, SEC Sues Kraken over Violations
Summary:
Changpeng Zhao (CZ), Binance CEO, is expected to resign following a deal with the U.S Department of Justice due to Anti-Money Laundering violations. Binance is set to pay a $4.3 billion settlement related to ongoing litigation. The transfer of $3.9 billion in Tether (USDT) between Binance wallets has sparked curiosity among the crypto community. In separate news, cryptocurrency exchange Kraken faces a lawsuit from the U.S. Securities and Exchange Commission (SEC) over alleged securities law violations.
Changpeng Zhao is set to resign from his position as Binance's CEO following a negotiated agreement with the U.S. Department of Justice. The crypto exchange had moved $3.9 billion in Tether (USDT) between its own wallets, just prior to the announcement of a $4 billion settlement. In separate news, the U.S. Securities and Exchange Commission (SEC) is suing Kraken for alleged violation of several securities laws. Additionally, Sam Altman and Greg Brockman are set to transition to Microsoft following Altman's removal from OpenAI.
Changpeng Zhao, or CZ, will admit to disregarding U.S. Anti-Money Laundering regulations according to a variety of sources and court papers revealed on Nov. 21. In line with the agreement, CZ is to resign from his role as CEO of the cryptocurrency exchange company, but maintain his majority ownership. He will be prohibited from holding any executive position at Binance in the future. Nonetheless, this agreement does not have any impact on the ongoing lawsuit with the SEC, which filed separate charges against Binance back in June.
Binance will pay settlement fees of $4.3 billion to accommodate the continuous case by the Commodity Futures Trading Commission and to account for outstanding claims made by the Treasury Department.
The crypto community on X (previously Twitter) has been closely watching a $3.9 billion Tether transaction between Binance wallets, which was revealed on social media around the same time reports of a prospective $4 billion settlement with the Department of Justice emerged. Speculations following these developments include inquiries regarding the source of these vast funds and the possibility that the transfer was in preparation for paying the aforementioned fines.
In other news, the SEC has initiated a lawsuit against Kraken, accusing the crypto exchange of mixing customer funds and violating registration requirements for securities exchange, broker, dealer and clearing agency. According to the SEC, Kraken's inefficient internal controls have allowed the unregulated trading of cryptocurrencies since 2018, leading to blending of up to $33 billion of customer assets with its own and creating a "significant risk of loss" for clients. While refuting the allegation of trading unregistered securities, Kraken has expressed disappointment over the lawsuit and stated its intent to defend its stance in court.
Earlier in February, Kraken agreed to a $30 million settlement with the SEC and committed to discontinue offering cryptocurrency staking products and services to U.S. customers. As a disclaimer, this article does not provide investment advice or recommendations, and all investment and trading decisions involve a degree of risk. Readers are therefore advised to undertake their own research before making a decision.
Published At
11/21/2023 7:06:43 PM
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