Key Takeaways:
The Binance CEO has led the company through troubled times and is now stepping down as the CEO of Binance.
The move is a part of the deal with the US Department of Justice and CFTC which will also receive $4 Billion from Binance. The charges against Binance was primarily money laundering.
Though Changpeng Zhao would still be the majority owner of Binance, the world's largest crypto exchange, he would accept a fate similar to Arthur Hayes when he made a deal with the US Department of Justice. A case filed by the SEC is not part of this deal.
The deal would make Binance pay $4 billion to Department of Justice and CFTC and also cost the Binance CEO, his job. The money reportedly includes civil settlement claims made by regulators.
There is a separate case against Binance currently being pursued by the US SEC which alleges operation of an unregistered exchange in addition to other charges for operation of crypto derivates.
A similar deal was struck with Arthur Hayes, on similar charges of money laundering. The deal was between BitMEX CEO and the Department of Justice. Arthur, who now has taken his new avatar as a crypto influencer, sentence was reduced to six months of house arrest and two years in probation.
The investigations started in 2018 when the Department of Justice registered cases against Binance for money laundering, conspiracy and criminal sanctions violations.
Again in May 2021, it was reported that Binance was under investigation by multiple federal agencies like the Internal Revenue Service and the Department of Justice.
In the wake of Russia's invasion of Ukraine, the Binance CEO refused to act against its Russian customers, citing "Financial Freedom". The exchange later banned Russian nationals from using P2P.
In October 2022, Reuters reported that the Binance CEO Changpeng Zhao and associates tried to "insulate" itself by an alleged manipulation of documents.
After the deal, Binance would still be majorly owned by Changpeng Zhao, who might now distance himself from active decision making in the company. The cryptocurrency exchange might be also allowed to operate its US-based crypto exchange business, the Binance.US.
In the USA, Binance.US was the arm which was operating as a crypto exchange.
Details of the deal are not clear yet and will be covered as they appear in the public.
Binance had been facing a lot of heat from several investigative agencies in the USA, France and Netherlands. In Belgium, it had also struck a deal with the local authorities and registered as a fresh applicant.
BNB the cryptocurrency of the Binance has been volatile as a shock from the news. The price of the cryptocurrency first rose by nearly 7% to reach $270 but immediately fell as a result of profit booking to $240.
At this stage, it is best advised to stay away from investing or trading in the cryptocurrency as new details which emerge with time would shift the market in opposite directions and thereby might wipe off your capital.
There were ripe speculations that the deal might set Binance free from the prosecutors but the stepping down of the Binance CEO was not expected.
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