Original author: Phyrex (X: @@Phyrex_Ni)
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《Special Topic｜Binance pleads guilty and settles, CZ steps down, biggest regulatory boot falls》
Editors note: On Tuesday, November 21, local time in the United States, Binance and its CEO CZ pleaded guilty to criminal charges of anti-money laundering and violation of U.S. sanctions, and reached a settlement with U.S. regulators and paid a fine of more than $4 billion. Behind the sky-high fines, are the sanctions against Binance and CZ a good thing or a bad thing? What role did the SEC, CFTC, US Treasury Department, etc. play in this incident? Is Binance’s imagination better off after being freed from its biggest shackles? Crypto analyst Phyrex published an article on the X platform to provide an in-depth explanation of the Binance sky-high fine incident and the full picture of CZ’s resignation as CEO. Odaily compiled it as follows:
More than 10,000 BTC, nearly 100,000 ETH, 400 million USDT, 150 million USDC, and $2.2 billion worth of ALT,These five data are the data on withdrawals from Binance in the last 24 hours. Although Binance still holds more than 6.7 billion US dollars in assets so far, the wave of withdrawals is not over yet.Assets are still being drained from Binance almost every minute,Almost everyone on the Internet was saying goodbye to CZ.Bloomberg’s front-page headline was half given to Hamas, half to CZ and Binance,If we push the time forward, I don’t know how many friends still remember that in October I focused on the House Finance Committee’s relentless pursuit of cryptocurrency as a source of terrorist financing. Last week, 57 members even signed a petition calling for it to be suspended. On the 27th of this month, Deng and Yellen gave details of cryptocurrency’s support for terrorist activities.
Bring time back to the present,Of the $4.3 billion in sky-high fines, the Financial Crimes Enforcement Network (FinCEN) settlement was $3.4 billion, and the Office of Foreign Assets Control (OFAC) settlement was $968 million.Of the $3.4 billion paid to the Financial Crimes Enforcement Network (FinCEN), $2.7 billion was paid to the Commodity Futures Trading Commission (CFTC). Of the $2.7 billion, $1.35 billion was transaction fees charged to U.S. customers, and the other $1.35 billion was paid to the Commodity Futures Trading Commission (CFTC). $100 million in fines,In addition, CZ himself was punished with a suspended fine of US$150 million.Looking at it this way, Binance’s biggest problem should be allowing American customers to participate in transactions. After all, this part has the highest fines.
But in fact, the answer given by the Ministry of Commerce, the highest agency that actually investigated Binance this time, is that it neither allowed Americans to trade nor violated securities laws. These are SEC matters. By the way,The settlement ends a years-long investigation on behalf of Binance and other agencies including the Treasury Department, the Department of Justice, and the Commodity Futures Trading Commission (CFTC), but not the U.S. Securities and Exchange Commission (SEC)., we will discuss this issue later. Rather, Binance violated U.S. anti-money laundering (AML) and sanctions laws that protect U.S. national security and the integrity of the international financial system.Binance does not strictly control the elements of traders on the platform, and allowing terrorists defined by Europe and the United States, including Hamas, to use it is the most intolerable thing for the United States.The rest is just a matter of money.
Therefore, in this report, both the Ministry of Commerce and the Ministry of Justice defined Binance as not implementing AML well, and even the Commodity Futures Trading Commission (CFTC) provided Binance staff in the actual prosecution. The chat involved Hamas’s record of buying an AK 47 for less than $600. This is what gives Binance the biggest headache.Violating the AML and financing terrorism are two completely different things.Fortunately, the direct answer given by Yellen this time is that Binance simply did not strictly implement AML, and CZ also admitted the charges of anti-money laundering and violation of US sanctions. This allowed Binance to actually avoid the biggest crisis. It can even be said thatStarting today, all Binance, including BinanceUS, faces is money, and money is the least of Binance’s worries.
According to the plea agreement,CZ’s maximum sentence of 10 years in prison will be reduced to no more than 18 months. Currently, CZ has given up the appeal and the sentencing will be postponed for 6 months.After paying a $175 million bail, he was released and could travel back and forth between the United Arab Emirates and the United States at any time. This treatment was also experienced by BitMEX co-founder and former CEO Arthur Hayes. At that time, Arthur Hayes was sentenced to 6 months of home detention. and a 2-year reprieve,From this perspective, CZ is most likely also under home detention.But this is not the point. The point is that Arthur Hayes, who has retired as CEO, is still the co-founder of BitMEX. Although he does not take on the work of BitMEX, he can jointly handle BitMEX matters in the form of a consultant.
Having said this, some smart friends may have already thought of it. It is true that CZ is no longer the CEO. Indeed, CZ’s self-report stated that he will take a break recently, but this does not mean that CZ will stay away from Binance, although CZ is no longer the CEO. ,butHe Yi, co-founder of Binance@heyibinanceHowever, he was not implicated in any way in this problem.she and@cz_binanceI don’t need to say more about the relationship, so has Binance changed? No, CZs role is more of a decision-maker than an executor. It doesnt matter whether he is the CEO. The CEO only works for the board of directors. This case did not deprive CZ of his status as a director, and the United States did not There is no way to deal with BinanceUS in the same way as TikTok, and even CZ can continue to tweet for Binance.
From the perspective of staged conclusions,It was the United States that used a reason that Binance could not ignore to make Binance make the final decision.Either you follow my rules and play within the framework of my rules, or you dont play anywhere else. This is why I focused on the fact that Binance only violated AML, rather than providing support to terrorists. These two decisions are actually made in a single thought. If you are obedient, it will be the former. If you are disobedient, it will be the latter. Choosing the former and being fined is not the purpose;Does the United States lack this $4.3 billion? What the United States lacks is whether the worlds largest cryptocurrency exchange behind the $4.3 billion is under its control. Yellens words are the best definition, The result of these agreements will be to end the long-term interference with the U.S. financial system and the U.S. Corporate conduct that poses risks to citizens and U.S. national security.”
At this point, Binance has been released from a blacklist of risk companies that pose a threat to the United States. This not only means that Binance still has the opportunity to operate BinanceUS, but also means that channels in the United States and Europe, including payments, can serve Binance again. , these are the most important to Binance, as I have stated many times before,Compliance will be what all current exchanges must face if they want to go further.Binance, which has always been under the iron fist of the US multi-sector, has had to give up many markets. From today on, these once abandoned markets and opportunities have the possibility to start again, and the payment is only a quarter’s profit and CZ nominal Left the position of CEO,soBinanceHas it changed? Things have definitely changed, and Binance’s imagination will be better after the biggest shackles are removed.
After BinanceUS solves the SEC problem, it will be more likely to be favored by Wall Street.It will also be one step closer to going public.When it comes to the SEC, we have to mention it.The SEC sued Kraken again yesterday, for almost the same reason as Coinbase.As we said before, this settlement in the United States does not include the SEC. This also means that the SEC’s supervision of Binance is not a matter of “political stance”. Even with the settlement with the CFTC, Binance has already paid In order to impose fines and confiscation of funds for allowing U.S. customers to trade, the SEC will most likely not continue to struggle with this issue.Then the remaining purpose of the SEC may be to pave the way for cryptocurrency compliance, and a milestone on this road may be Bitcoin and Ethereum spot ETFs.
Of course, for Binance, which has got rid of the biggest shackles, the issue with the SEC does not involve criminal matters.It should even be said that there is no longer a lawsuit between Binance and the SEC. The only ones who have a lawsuit are BinanceUS and CZ himself.Then the result is nothing more than either to bear it like Coinbase and Kraken, or to reconcile. No matter which one it is, it is just a matter of money.From my personal understanding, the latter is more likely.After all, Coinbase is a listed company in the United States, Kraken is also a compliant exchange in Europe and the United States, and BinanceUS is essentially an important layout for Binance to be listed in the United States and bundle Wall Street funds. The biggest problem between BinanceUS and the SEC is Binance itself and CZ itself, now the former is fine and the latter has accepted the punishment.
So as long as BinanceUS chooses to reconcile with the SEC, BinanceUSs road to listing will be smooth. Of course, the most critical thing in this process is the reconciliation conditions between BinanceUS and the SEC.So when we finally look at this issue from God’s perspective, we can know that the overall situation is a win-win situation. The United States has removed an uncontrolled financial risk, and Binance has removed the long-arm jurisdiction and all the long-arm jurisdiction of the United States. the collateral damage caused,The so-called sky-high fine is the first step in Binance’s “Compliance Certificate”. As for CZ, it only removed an unimportant title, but obtained the “identity” of free entry and exit of the United States. It also means that both Binance and CZ can participate in the US political and economic fields under the sun,On the contrary, what I want to know most now is, is it the Democratic Party or the Republican Party? There must be one.
The adult world considers more interests, whether they are national interests, corporate interests or private interests.Whether Binance is really one of the financing channels for Hamas this time is not the most important. The most important thing is that as long as this hat is removed, what Binance will face is no longer just economic interests. The game of cat and mouse has risen to the level of national security.This is not something that can be done with money. What we saw was a $4.3 billion transaction disclosed, but underneath it was the life and death line between Binance and CZ, and the result was that Binance and CZ used The least valuable price has completed the identity transformation. The instantaneous surge and fall of Coinbases stock price last night is the best proof.
Not only did Binance’s incident fail to increase Coinbase’s market value and market potential,Instead, the market realized that after getting rid of the shackles, Binance was once and for all qualified to challenge Coinbase in the United States.This incident is both demining and good for the cryptocurrency industry itself. At least within the foreseeable two or three cycles, as long as Binance does not commit suicide, things will get smoother and smoother. In fact, FTX and Sam have provided the best process. The FTX main site is developing wildly. As long as it is under the framework and supervision of the United States, it can be done in any way, and FTXUS is a money-attracting weapon in the United States.Compliance, tying up with Wall Street, and going public are the brightest paths for BinanceUS.
