Crypto coin today - Did Binance's CZ predict his own downfall?
Did Binance’s CZ predict his own downfall?

Crypto Currency Latest: Binance’s $4.3 Billion Settlement with US Government

Five years ago, the cryptocurrency industry was abuzz with the meteoric rise of Binance, an exchange that had the highest trading volumes among its competitors, even though it did not yet support fiat currency. Despite critics questioning why the world needed another exchange, Changpeng “CZ” Zhao was undeterred.

In June 2018, Cointelegraph had a one-on-one interview with CZ to discuss Binance’s success, which was facilitated by its native BNB (BNB) token and a 50% fee discount. Half a decade later, the exchange has agreed to a $4.3 billion settlement with the United States government over civil regulatory enforcement actions against it. The U.S. civil case found that Binance’s policies allowed criminals involved in illicit activities to move “stolen funds” through its platform.

Crypto Currency Latest: Binance Founder Pleads Guilty

The Bank Secrecy Act violation charges against Binance founder, Zhao, led to his resignation as CEO and a $175 million bail bond being issued. Reflecting on the situation in 2018, Zhao was conscious of the increasing attention on Binance, as its trading volumes exceeded those of its competitors.

Zhao defended Binance’s trading volume integrity, asserting that they accurately reported their trades, while other exchanges “double-reported” to appear more attractive to users. The exchange was funded by an ICO of $15 million.

The crypto currency latest news is that Zhao pleaded guilty and has been released on bail. This has sparked a global discussion on crypto legal issues, government regulation, and the implications of the upcoming Fed meeting for crypto law.

Coinbase and other exchanges have also been in the spotlight, as the crypto coin today is increasingly scrutinized with regards to trading volumes and the integrity of Initial Coin Offerings (ICOs).

Binance’s Successful ICO

Zhao spoke passionately about the impact of the ICO on the growth of Binance: He suggested that had the company raised funds through traditional venture capital rounds, its progress would have been significantly slower. The ICO phase saw the registration of 25,000 users, who became “investors, coin holders and users”, according to Zhao.

By the time Zhao left and Richard Teng took over as CEO, Binance’s $15 million ICO had transformed into a $60 billion company. Zhao’s words five years ago have been proven to be accurate, as Binance has faced legal challenges in various countries due to its ambitious expansion plans.

Crypto Currency Latest: Binance Facing Challenges

The crypto currency landscape has come to a head in the U.S. with a major enforcement action and subsequent multibillion-dollar settlement. Binance, a major crypto exchange, has faced localized challenges in other countries, including exiting the Netherlands after failing to meet jurisdictional compliance.

The exchange has found a new base in the United Arab Emirates, where its CEO Changpeng Zhao (CZ) is domiciled and is expected to return to the U.S. for sentencing sometime in 2024.

Coinbase CEO Brian Armstrong took to X (formerly Twitter) to underscore the importance of meeting regulatory standards, and how his exchange’s measured approach has avoided the current situation Binance finds itself in. “This meant we couldn’t always move as quickly as others. It’s more difficult and expensive to take a compliant approach. You can’t launch every product that customers want when it’s illegal. But it’s the right approach because we believe in the rule of law,” Armstrong said.

Armstrong’s opinion reflects the overall attitude in the crypto space, with some taking bold steps while others are more conservative. This doesn’t necessarily make the latter immune to criticism, as Coinbase is still in a legal dispute with the US Securities and Exchange Commission over potential securities violations.

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