On Tuesday local time, Changpeng Zhao, CEO of Binance, the world’s largest cryptocurrency exchange, arrived at the federal court in Seattle, USA.
According to a comprehensive agreement with the U.S. Department of Justice, Changpeng Zhao will plead guilty to money laundering charges and pay a fine of US$50 million (approximately RMB 357 million).
At the same time, the U.S. Department of Justice stated that Binance pleaded guilty and agreed to pay a fine of more than $4 billion (approximately RMB 28.556 billion) to the U.S. authorities.
According to media reports on the 22nd, Zhao Changpeng announced his resignation, saying that his current resignation was the right move and he would take responsibility for the mistakes he made. Zhao Changpeng also stated that the funds are safe and the settlement agreement reached with the U.S. Department of Justice does not involve fund misappropriation or market manipulation.
Richard Teng, a long-time Binance executive, will succeed Changpeng Zhao as Binance’s new CEO. Richard Teng said that he wants Binance users to feel confident about their finances, safety and security; Binance is stronger than ever; it is focused on cooperating with regulatory agencies; it hopes to work with partners to promote growth and adopt Web3.
However, Binance said that the company’s former CEO Changpeng Zhao is still Binance’s major shareholder.
After the above news was announced, Binance Coin fell by nearly 6%. The price of Bitcoin fell nearly 2% in 24 hours and was located at $36,800.
Public information shows that Binance is a global cryptocurrency exchange that provides a trading platform for more than 100 cryptocurrencies. In April 2018, Binance’s 1.4 million transactions per second attracted 6 million users, making it the world’s largest cryptocurrency exchange. Binance, whose name is based on the combination of the words binary and finance, offers trading in more than 150 cryptocurrencies, including Bitcoin, Ethereum, Litecoin and its BNB token.
Changpeng Zhao, the founder of Binance, has already become a well-known figure in the "currency circle". Zhao Changpeng was born in Lianyungang, Jiangsu Province. He is a Chinese Canadian entrepreneur. At the end of 2021, against the backdrop of the surge in Bitcoin and many other cryptocurrencies, Changpeng Zhao became the richest man in China with a net worth of US$94.1 billion (approximately 634.8 billion yuan). He also ranked among the top ten richest people in the world and became famous all over the world.
Now, according to the 2023 "Hurun Global Rich List", Zhao Changpeng's net worth is only 80 billion yuan.
U.S. officials “attack heavily” on the cryptocurrency industry
In recent years, U.S. officials have begun to "attack hard" on the cryptocurrency industry.
According to the Daily Economic News on November 4, on the evening of November 2, local time, after 15 days of testimony and approximately four and a half hours of deliberation, the jury convicted the well-known cryptocurrency exchange FTX of wire transfer fraud, conspiracy to commit fraud, Sam Bankman-Fried (SBF) was convicted on all seven charges including conspiracy to launder money. The founder of FTX, a former currency tycoon and a global billionaire, will spend the rest of his life in prison.
In early June this year, the SEC sued Binance, the world's largest cryptocurrency exchange, and its founder Changpeng Zhao for violating U.S. federal securities laws, claiming that Binance and Changpeng Zhao operated a "fraudulent network." The next day, the SEC filed a lawsuit against Coinbase, the largest cryptocurrency platform in the United States. Today, cryptocurrencies considered unregistered securities by U.S. regulators now exceed $120 billion.
In addition to the two major trading platforms, the indictment also disclosed that since 2020, many industry giants have participated in cryptocurrency financing that was accused by the SEC of violating securities laws, or are cooperating with currency circle projects that issue tokens illegally. Among them are Mastercard, HSBC, Adidas, Prada, Disney, Samsung and Barcelona.
Nowadays, the business environment in the United States has become increasingly complex, and it is not just Binance and Coinbase that have been sued this year. In January this year, the SEC charged the creator of the CoinDeal crypto scheme and seven others in connection with a $45 million fraud. In February, the SEC accused Terraform and CEOs Do Kwon and Nishad Singh of defrauding investors in crypto transactions.
According to previous reports by Mijing.com, as early as March 27, local time, the U.S. Commodity Futures Trading Commission (hereinafter referred to as CFTC) had sued Binance and its CEO Changpeng Zhao for allegedly violating regulatory measures. It is reported that the CFTC filed the above-mentioned lawsuit in the Chicago Federal Court on March 27, Eastern Time. The CFTC stated that Binance was not registered with it, thus evading a series of its obligations.
Bloomberg reports that since at least 2021, the CFTC has been investigating whether Binance failed to prevent Americans from buying and selling cryptocurrencies and their derivatives. According to CFTC rules, if a platform allows Americans to trade certain derivatives, it must register with the agency.
According to the Beijing Business Daily, Chen Jia, a researcher at the International Monetary Research Institute of Renmin University of China and an independent international strategy researcher, believes that the crypto-asset industry urgently needs to accelerate the construction of exchange trust infrastructure under an opaque mechanism. This issue is highly technical and involves many aspects. However, the general direction of the reform path has become increasingly clear. For the future cryptocurrency industry to develop sustainably, the four aspects that need to be solved urgently are: compliance, security, risk control, and liquidity. These are also the four aspects of future U.S. crypto asset exchanges. Big foundation. Controllable risks can effectively limit contract shortfalls, self-owned fund transactions, misappropriation of customer funds for speculation, and other issues caused by the exchange's lack of transparency. #BTC #etf
