CZ's and Binance's Legal Trouble and How the Crypto Market Dodged a Massive Bullet
The news is out and everywhere that the former CEO of Binance Changpeng Zhao (CZ), and the company itself Binance are facing serious legal troubles.
The American Securities and Exchange Commission (SEC), filed some charges against CZ and Binance, alleging that they violated the Bank Secrecy Act (BSA), involved themselves in Money Laundering, etc.
And now, in order to be free of these charges and continue operations, CZ and Binance have entered into a deal with the prosecution. A deal that would see CZ step down like he just has, and pay the sum of $50 million. While Binance itself would have to pay $4.3 Billion.
The craziest thing about this, which seems to not be seen for how crazy it really is, is the fact that CZ is also to pay the sum of $175 million bail money.
Not only would he pay this bail money, but he would also be required to "return" to the US two weeks before the 23rd of February, 2024, when he'll face a judge for sentencing.
Failure to make himself available by then would attract a $250,000 fine and a sentence of up to 10 years in jail maximum.
You can read Cointelegraph's report on the matter here.
This is one of the craziest things to happen in Crypto history, but most people and outlets who talk about it don't seem to appreciate how crazy it is!
First of all, who pays bail money without being arrested? This means CZ was arrested. If he was arrested, when was he arrested? And why was there never a big headline that read: "CZ arrested"?
Why was the whole arrest thing and the SEC's/DOJ's moves against CZ and Binance kept a secret until now that a resolution has begun?
Just 3 weeks ago, after Sam Bankman-Fried was found guilty, people started to talk about how the SEC and DOJ are going to go for some more high-profile names in the crypto space. This tweet is an example:
But there was no mention of CZ. Meanwhile, from the SEC's petition, it is clear they have been investigating CZ and Binance for a very long time now. Why was everything done so quietly, almost like it was nothing?
Well, we have only one explanation that makes sense, and that is everyone involved agreed to avoid Fear, Uncertainty, and Doubt (FUD).
What a red day it would have been for the entire Crypto market if the headlines ever read all of a sudden that CZ was arrested and that he and Binance were under trial for Money Laundering, violation of the BSA, etc.
What a bloody day it would have been for the market!
Before this incident, CZ was one of the most trustworthy figures in the space. Binance too. Plus, Binance is such a huge exchange. It would have been such a big blow if it got out that these two were now found wanting by the law.
Obviously, it's not public knowledge exactly how the whole arrest, CZ in America, deal negotiations with the DOJ, etc went. But it's almost certain CZ was approached quietly because the guys in charge didn't want to spread FUD.
Either that or it was CZ's own idea to keep things quiet in exchange for his complete cooperation and submission.
I saw a post somewhere that said something along the lines of "Jesus died for your sins, CZ died for your bags", and I found it hilarious, but I couldn't agree more!
CZ gave himself, and played it all cool, not minding how much himself or the company would lose, all in the bid to not make damaging breaking news! All in a bid to not spread FUD.
Look how quietly a case that requires settling with about $4.5 Billion is being settled so quietly, almost like it's nothing. We really dodged a bullet here, because this was supposed to be a mountain, but now it's just an anthill.
Another further thing to rejoice about is the fact that the allegations against Binance do not say user funds are in danger, were mismanaged, or that users were defrauded. Everything is about some US laws and regulations for business operations.
Phew!
[Cover Image from Coinmarketcap]
The End
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Cz was one of the most trusted people in the crypto world?
Are you kidding me the entire reason why our blockchain is the hive blockchain is because of his involvement in the huge takeover and misuse of users funds.
Oh yeah that's right a huge amount of steak ended up getting powered up and then Justin scum decided that it was a bad idea, however there was a 13-week power down.. users were horrified to realize that their crypto was stolen by binance to fund this and that they couldn't access their funds because it was all tied up on a 13-week power down schedule! That's the reason why Justin scum got really mad and demanded that everything changed specially just for him to have an instant power down so that binance and CZ wouldn't collapse...
Absolutely you should boycott binance as they tried to screw us over. Knowingly. I mean if you would have even looked into the situation you would have known the particulars!
However excellent post and thank you very much for sharing all this!
I agree he screwed up with all these things you said, and on Hive I'm probably supposed to calm down with how I say anything nice about him, but the facts are still the facts. He still was one of the most trusted names out there.
Binance has had a lot of improvements and made a lot of moves without falling victim to hacks or getting bankrupt. They are the biggest exchange in the world. All of these have made him quite a trusted mf.
Was... You misspelled was...
And he really is a tarnished individual. The breakup of his controlling share is really going to help the future of crypto. Just wait.
I can agree that he was very popular and a lot of people did listen to him however trust isn't exactly something he was good at. Justin trusted him. And then CZ screwed him over as well... Yeah that's right when CZ found out that a massive amount of customer stake was tied up in the middle of our takeover and that he got caught? He immediately screwed over Justin sun and wanted his money back...
Seriously would you trust that person with your money?
You say what you want and your opinion is valuable. Same thing for me.
Personally I don't like the guy. However he's just one person in the entire world.
However you did screw over the entire community here and I'm not going to remember that he is a good guy. I'll remember for him what he is. The businessman that got caught with another really bad decision that he made.
Well, I hope the whole thing would be good for crypto like you said.
Binance is the biggest exchange in the world, so clear a lot of people trust him with their money. I agree he's done a bunch of messed up stuff, though.
Lol. Come on, bro. Well, I wasn't really around when the who thing with Justin Scum was happening even though I've been here since 2017. But when I became active again I completely abandoned Steem and went with Hive after reading about the trouble.
Hopefully you sold the steam for hive! Lol
That was wonderful....
they knew cz a big fish and if this news gets out, people will come out to save him.
Lol. To save him?
or to kill him? :o
Hmm, this is deep. I guess the fear of people backing off from using Binance would have prompted in to comply with the law. There is a popular saying that nothing goes for nothing. It is one of the sacrifices someone has to make to keep the business going.
It is so unfortunate that someone like him would be involved in such a scandal. Though, we can say until he is proven guilty.
Lately we have seen a lot of news against Binance but till now it is avoiding all these and I think it will come out from all these problems in the future.