SEC vs Binance

[pawel7777]

Wow. This is insane. I did not see that coming.
Are we sure that $4.3 billion is the correct figure and not typing error? Fincen is reporting on $3.4 billion, which is the highest settlement in US history:

FinCEN’s historic $3.4 billion settlement is the largest penalty in U.S. Treasury and FinCEN history. 
Binance admits that it willfully operated as an unregistered money services business (MSB) while obscuring its ties to the U.S. and maintaining its most commercially important U.S. customers.

https://home.treasury.gov/news/press-releases/jy1925

I have my doubts whether Binance will survive that. They already received severe beating from almost every side (I had to move my funds elsewhere due them no longer supporting GBP transactions). Media are already reporting that ~$1 billion of assets has left the platform after the news came out and it's not going to get any better anytime soon.
Unless the settlement allows the payment to be made in manageable chunks over a long period of time, I think this might be the end of Binance. Or maybe they'll just scale down, stay outside of the US sphere of influence and never pay that fee. I guess we'll have to wait and see.

"Binance encouraged U.S. users to obscure their location" - do we have any details on what exactly is this referring to? I find it hard to believe they were openly encouraging US customers to sign up.

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[zasad@]

Wow. This is insane. I did not see that coming.
Are we sure that $4.3 billion is the correct figure and not typing error? Fincen is reporting on $3.4 billion, which is the highest settlement in US history:

I quoted the news, but as I understand it, 4.3 billion is the total amount of fines, otherwise there are errors in many news stories.
https://www.theguardian.com/business/2023/nov/21/binance-settlement-crypto-exchange
"The attorney general Merrick Garland said at a press conference that the total of $4.3bn in fines Binance and Zhao had agreed to pay as part of guilty pleas was one the largest penalties the justice department had ever obtained from a criminal matter."

[FP91G]

Changpeng Zhao, Binance’s ex-CEO, represents a substantial risk of flight given his minimal ties with the U.S., prosecutors said.

U.S. prosecutors are asking Changpeng Zhao, Binance founder and ex-CEO, not to leave the country ahead of his sentencing hearing scheduled for February 2024.

In a filing on Wednesday, prosecutors said that Zhao, a citizen of the United Arab Emirates and Canada, should not be permitted to return to his home in the UAE before sentencing on February 23 next year given “the substantial risk of flight posed by Zhao.”
https://www.theblock.co/post/264457/prosecutors-seek-to-keep-cz-in-the-u-s-until-february-sentencing

[CryptoKaZee]

Wow. This is insane. I did not see that coming.
Are we sure that $4.3 billion is the correct figure and not typing error? Fincen is reporting on $3.4 billion, which is the highest settlement in US history:

I quoted the news, but as I understand it, 4.3 billion is the total amount of fines, otherwise there are errors in many news stories.
https://www.theguardian.com/business/2023/nov/21/binance-settlement-crypto-exchange
"The attorney general Merrick Garland said at a press conference that the total of $4.3bn in fines Binance and Zhao had agreed to pay as part of guilty pleas was one the largest penalties the justice department had ever obtained from a criminal matter."

The total fees associated with this settlement exceed $4 billion, comprising a forfeiture of $2.5 billion, a fine of $1.8 billion, and personal payments from Zhao amounting to about $50 million​​​​. https://crypto.news/zhaos-resignation-and-guilty-plea-a-new-era-for-binance-and-crypto/

[philipma1957]

sec wins!

after the battle they had over ripple which they lost I thought they would lose this one for sure.

[Myleschetty]

sec wins!

after the battle they had over ripple which they lost I thought they would lose this one for sure.

I don't know what you mean by the SEC wins. Although, CZ pleaded guilty to money laundry but his hearing is still tomorrow and that's why he was told to remain in the US before he sought permission to travel which I don't know if he was granted permission.

[philipma1957]

sec wins!

after the battle they had over ripple which they lost I thought they would lose this one for sure.

I don't know what you mean by the SEC wins. Although, CZ pleaded guilty to money laundry but his hearing is still tomorrow and that's why he was told to remain in the US before he sought permission to travel which I don't know if he was granted permission.

Well CZ plead guilty so he lost as he is guilty
that would mean the sec wins.

When a government agency is going after you and you plead guilty most people would say the government win and the plaintiff loses.

CZ is a convicted criminal by his own admission.

Does this mean I think he is bad evil etc. No it means he lost the case.

[pawel7777]

I don't know what you mean by the SEC wins. Although, CZ pleaded guilty to money laundry but his hearing is still tomorrow and that's why he was told to remain in the US before he sought permission to travel which I don't know if he was granted permission.

If the settlement is reached and it's Binance that will be paying the fees, not SEC, and if Binance will be effectively out of the US (which was probably the goal of the prosecution) and if CZ pleads guilty of (some of) the charges, then it's a big win for the SEC, however, you want to look at it.

It's puzzling how a lot of the major news worldwide are reporting on CZ pleading guilty to money-laundering charges, which is completely not true. As far as I understand, CZ pleaded guilty on a violation of sanctions/restrictions, which has nothing to do with actual money laundering. Violating "Anti Money Laundering" laws doesn't have to mean money laundering.

It's a shame, from the customers' perspective, Binance was one of the most solid centralised exchanges out there. I hope they'll survive, although, without CZ, it might not be the same.

[virasog]

I don't know what you mean by the SEC wins. Although, CZ pleaded guilty to money laundry but his hearing is still tomorrow and that's why he was told to remain in the US before he sought permission to travel which I don't know if he was granted permission.

If the settlement is reached and it's Binance that will be paying the fees, not SEC, and if Binance will be effectively out of the US (which was probably the goal of the prosecution) and if CZ pleads guilty of (some of) the charges, then it's a big win for the SEC, however, you want to look at it.

It's puzzling how a lot of the major news worldwide are reporting on CZ pleading guilty to money-laundering charges, which is completely not true. As far as I understand, CZ pleaded guilty on a violation of sanctions/restrictions, which has nothing to do with actual money laundering. Violating "Anti Money Laundering" laws doesn't have to mean money laundering.

Some people are presenting in such a way that CZ Volunteering stepped down as a gesture to save binance from all these money laundering allegations which may not be true as it was SEC who put all these cases on binance owner and he had no choice but to either proof himself right or face the consequences.
$4.3 billion settlement is one of the biggest settlements in the history of crypto.

It's a shame, from the customers' perspective, Binance was one of the most solid centralised exchanges out there. I hope they'll survive, although, without CZ, it might not be the same.

Richard Teng is the new CEO of Binance and for sure, when things are run under the new management, we never know how they progress. If SEC stops chasing them, Binance may still come good out of this crisis but if the SEC regulations keep on tightening on binance then I am afraid Richard Teng won't be able to resist much.

[Binance Coin]

The story can be considered complete, close the topic

[pawel7777]

$4.3 billion settlement is one of the biggest settlements in the history of crypto.

I don't think people realise how serious that fee is. It's not "one of the biggest" but the biggest penalty, and not only in history of crypto, but in history of the treasury department. Google is not very helpful on this one, but I believe the previous highest fines were all below $1 billion.
This shows how hard they came on Binance, but also how serious the crypto industry has become, and I don't think the owners of the top crypto-businesses have been prepared for all this.
I wouldn't be surprised if CZ resigned just to see the end of it all and not risk a long time in prison. He still may be subject to investigation, but I imagine the settlement reached indicates the authorities are willing to drop the charges or at least go easy on him personally.
I wonder if this would ever happened if Binance made some big political donations like the FTX did.

Richard Teng is the new CEO of Binance and for sure, when things are run under the new management, we never know how they progress. If SEC stops chasing them, Binance may still come good out of this crisis but if the SEC regulations keep on tightening on binance then I am afraid Richard Teng won't be able to resist much.

I don't see them being allowed to freely compete in US or EU. That looked like a targeted action to remove the Chinese business from being on the top in favour of locally owned exchanges.

[Myleschetty]

sec wins!

after the battle they had over ripple which they lost I thought they would lose this one for sure.

I don't know what you mean by the SEC wins. Although, CZ pleaded guilty to money laundry but his hearing is still tomorrow and that's why he was told to remain in the US before he sought permission to travel which I don't know if he was granted permission.

Well CZ plead guilty so he lost as he is guilty
that would mean the sec wins.

When a government agency is going after you and you plead guilty most people would say the government win and the plaintiff loses.

CZ is a convicted criminal by his own admission.

Does this mean I think he is bad evil etc. No it means he lost the case.

You have a point but I believe he pleaded guilty just to waive the right to a trial but the lawsuit appears to be far more than we think because the US SEC's latest statement was that  CZ committed an FTX level of fraud.
What I am surprised about the whole lawsuit is that much information is not provided as to the reason why the SEC believes CZ committed the SBF level of offense.
Having said that, I starting to believe BlackRock has something to do with the lawsuit cause they want to be the major player in the US crypto market after the spot ETF approval.

The story can be considered complete, close the topic

The topic should be closed because want it?
This is a decentralized forum and since the story behind the reason why the topic was created is still in development automatically the topic is not completed.

[UmerIdrees]

The story can be considered complete, close the topic

The story isn't completed yet. The media wants us to see only one side of the picture where we see that SEC has finally sued CZ and he is no longer the CEO but was this game between Binance VS SEC  OR  CZ vs SEC ?

CZ stepping down as the CEO by no means tells that Binance's future is dark or the exchange will be less popular as time goes on. This is not going to happen in my opinion. It is not easy to shut down binance worldwide when it is the most liquid exchange at the moment. Also, I don't think the Blackrock or others may overcome binance, outside the US binance market is too much strong.

[pawel7777]

CZ stepping down as the CEO by no means tells that Binance's future is dark or the exchange will be less popular as time goes on. This is not going to happen in my opinion. It is not easy to shut down binance worldwide when it is the most liquid exchange at the moment. Also, I don't think the Blackrock or others may overcome binance, outside the US binance market is too much strong.

Well, I don't know whether we have any reliable source of info on Binance actual liquidity, but media have been reporting on customers pulling out around $1 billion of assets after the announcement of the settlement was made.
I think Binance has been managed very well so far, with no evidence of them pulling any stunts like fractional reserves banking or similar things. But the agreed penalty is huge and we don't know what payment arrangements have been made. I'd imagine the payments would be spread over longer time, but the impact could still be crippling if the customers get spoofed and the volume drops significantly.
On top of that, as discussed earlier in this thread, Binance have not only had problems in the US but also in multiple other countries as well, so we don't know if there will be any further penalties and if Binance will ever return to markets they had to pull back from.

[zasad@]

https://cointelegraph.com/news/what-next-binance-changpeng-cz-zhao
"Zhao was released under a $175 million bond that requires him to return to the U.S. 14 days before his sentencing date, which is scheduled for Feb. 24, 2024. In his comments, Stark noted that Judge Richard Jones is expected to consider the government’s motion on Nov. 27, possibly strengthening the bail requirements through additional bond conditions or delaying a decision."
__
I think that CZ will still pay off with a lot of money. And if you are wondering who will be in charge in the US market, then look at who BlackRock is investing in.
The correct answer is Coinbase!

[bbc.reporter]

https://cointelegraph.com/news/what-next-binance-changpeng-cz-zhao
"Zhao was released under a $175 million bond that requires him to return to the U.S. 14 days before his sentencing date, which is scheduled for Feb. 24, 2024. In his comments, Stark noted that Judge Richard Jones is expected to consider the government’s motion on Nov. 27, possibly strengthening the bail requirements through additional bond conditions or delaying a decision."
__
I think that CZ will still pay off with a lot of money. And if you are wondering who will be in charge in the US market, then look at who BlackRock is investing in.
The correct answer is Coinbase!

Agreed. Similar to what I have been saying before, Coinbase is Blockrock's partner for their ETF, being their custodian. Blackrock might have also invested in Coinbase's stock which might make them a stockholder and they might have voting rights on the exchange.

In any case, there might be another company in danger of being attacked and this is Tether. Blackrock has invested and also partnered with Circle the issuer of USDC. I will not be shocked if Blackrock is trying to kill the competition of their partners first before the final scheduled date of approval for their ETF.

[zasad@]

https://cointelegraph.com/news/what-next-binance-changpeng-cz-zhao
"Zhao was released under a $175 million bond that requires him to return to the U.S. 14 days before his sentencing date, which is scheduled for Feb. 24, 2024. In his comments, Stark noted that Judge Richard Jones is expected to consider the government’s motion on Nov. 27, possibly strengthening the bail requirements through additional bond conditions or delaying a decision."
__
I think that CZ will still pay off with a lot of money. And if you are wondering who will be in charge in the US market, then look at who BlackRock is investing in.
The correct answer is Coinbase!

Agreed. Similar to what I have been saying before, Coinbase is Blockrock's partner for their ETF, being their custodian. Blackrock might have also invested in Coinbase's stock which might make them a stockholder and they might have voting rights on the exchange.

In any case, there might be another company in danger of being attacked and this is Tether. Blackrock has invested and also partnered with Circle the issuer of USDC. I will not be shocked if Blackrock is trying to kill the competition of their partners first before the final scheduled date of approval for their ETF.

Tether follows the right policy and invests its dollars in the American economy, that is, Treasuries, so they can come to an agreement. This CZ is alien and came to the American market with questionable schemes. On the one hand, Tether is needed by regulators so that Circle does not become impudent, but on the condition that Tether follows the correct policy. And if not, then I am sure that there are already large mountains of accusations against this company.

[pawel7777]

I think that CZ will still pay off with a lot of money. And if you are wondering who will be in charge in the US market, then look at who BlackRock is investing in.
The correct answer is Coinbase!

It's getting blatantly obvious that Coinbase has a silent support from SEC (and possibly other bodies) and is set to have a near monopoly on the US market. It's not just Binance that's being under attack. SEC has filed another complain against Kraken, despite them paying $30 millions under a settlement not that long ago (at the beginning of the year). This is getting ridiculous.
Jesse Powell (co-founder of Kraken) is losing it and attacks SEC on X
https://twitter.com/jespow/status/1726791124650713134?s=20

[zasad@]

I think that CZ will still pay off with a lot of money. And if you are wondering who will be in charge in the US market, then look at who BlackRock is investing in.
The correct answer is Coinbase!

It's getting blatantly obvious that Coinbase has a silent support from SEC (and possibly other bodies) and is set to have a near monopoly on the US market. It's not just Binance that's being under attack. SEC has filed another complain against Kraken, despite them paying $30 millions under a settlement not that long ago (at the beginning of the year). This is getting ridiculous.
Jesse Powell (co-founder of Kraken) is losing it and attacks SEC on X
https://twitter.com/jespow/status/1726791124650713134?s=20

"Nothing personal just business"(C)

____

https://www.cftc.gov/PressRoom/PressReleases/8837-23

Federal Court Enters Order Against Binance and Former CEO, Zhao, Concluding CFTC Enforcement Action
"Washington, D.C. – The Commodity Futures Trading Commission today announced the U.S. District Court for the Northern District of Illinois has approved the previously announced settlement and entered a consent order of permanent injunction, civil monetary penalty, and equitable relief against Changpeng Zhao and his companies Binance Holdings Limited, Binance Holdings (IE) Limited, and Binance (Services) Holdings Limited (together, Binance). In formalizing the settlement initially announced on November 21 [See CFTC Press Release No. 8825-23], the court finds Zhao and Binance violated the Commodity Exchange Act (CEA) and CFTC regulations, imposes a $150 million civil monetary penalty personally against Zhao, and requires Binance to disgorge $1.35 billion of ill-gotten transaction fees and pay a $1.35 billion penalty to the CFTC. The order also obligates Zhao and Binance to make certifications as to the existence, application, and efficacy of Binance’s improved compliance controls, and permanently enjoins them from further violations as charged. "

[safar1980]

Hacker Sells Access to Binance’s Law Enforcement Portal, Cryptocurrency Holders at Risk.

Although threat actors often lie about accesses they possess, in this example it appears the threat actor maintains positive reputation from previous sales conducted on the forum, and they also offer a range of other unrelated accesses.

The asking price for the access is $10,000 in Bitcoins or Monero.
In order to identify how the threat actor obtained access to the panel, Hudson Rock researchers first located the location of Binance’s law enforcement panel which is hosted on kodexglobal.com