Foundation
Back in 2017, one of the biggest names in the crypto industry was born. Changpeng Zhao founded Binance, a cryptocurrency exchange based in China. Years later, it moved to Japan due to the restrictions and bans imposed by the Chinese government on the crypto industry in the country.
Binance, for years, has been the number one crypto exchange for daily transactions volume and one of the most important players, along with charity moves, the development of the Binance smart chain, and the useage of binance native Binance token BNB.
Crypto War
For the last couple of years, initially when US Security and Exchange Commission (SEC) sued Ripple, over unregistered securities offering, China's government issued bans and restriction over crypto, there was an undeclared war against crypto and its industry.
Alongside the many influences of questionable value, to say at least, that were advertised many token of questionable value, and in many cases, without the proper knowledge and transparency that they had given out those said tokens, making their followers their exit liquidation, and with the bear market that followed the all-time-high on 2021, when one bitcoin was equal to more than $68,900, and the black swan event on 2020 regarding coronavirus, all these were the fuel for authorities in many countries to accuse cryptocurrencies for many bad things that people do either way.
Department of Justice
So, it was time to go after the biggest player and investigate the transactions on the exchange. The process started in 2021, with Binance fully cooperating with the US authorities.
The investigation was fruitful and Department of Justice found many offenses to be true. The next step was to make a settlement: a $4.5 billion fine and the prosecution of Binance's CEO.
The well-known as CZ stepped down from his position of CEO and pleaded guilty, but the key part were the accusations: knowingly operating as an unlicensed money services business from August 2017 to October 2022. Allegations include failure to register with FinCEN, inadequate money laundering controls, processing transactions for illicit activities, violating sanctions, and not reporting suspicious transactions linked to groups like Hamas.
Why these are a key part? Because none of these allegations were about binance client funds! Never, as ZC itself tweeted, and of course such a tweet should have the approval of the DoJ, there was in no way clients’ fund misuse!
The day after
The fact that the clients’ funds were, are and will be safe was part of the big difference between the Sam Bankman-Fried and Binance case. That's why the DoJ made the deal, because there was not an attempt to deceive the clients.
And, of course, there is an other thing. If the Department of Justice brought Binance to a court, and found guilty, as clearly is, then it couldn't make it unharm, and that would have hurt the crypto market, too. In fact the fall of Binance could have destroy the entire industry.
Department of Justice just wants someone to pay for the wrong deeds, not destroy the crypto market, and be assured that the “legacy” market would have been affected.
Also, this may show the willingness of the authorities to provide the safety that many institutions wants. To show the willingness to separate the bad actors such as Sam Bankman-Fried, who clearly wanted to steal money with deception from their own clients, and a company that didn't comply with the laws, and let individuals to clean up their money, or fund their not so good jobs.
A step forward
I, personally, see this development as a positive step forward, for both companies and authorities.
The need for regulation is real, but the authorities have to listen and cooperate with the companies and individuals that know the crypto space, to make a safe place, but, also, to create the room for development and continue make the crypto space a place to make leaps of progress!