The news is out and everywhere that the former CEO of Binance Changpeng Zhao (CZ), and the company itself Binance are facing serious legal troubles.
The American Securities and Exchange Commission (SEC), filed some charges against CZ and Binance, alleging that they violated the Bank Secrecy Act (BSA), involved themselves in Money Laundering, etc.
And now, in order to be free of these charges and continue operations, CZ and Binance have entered into a deal with the prosecution. A deal that would see CZ step down like he just has, and pay the sum of $50 million. While Binance itself would have to pay $4.3 Billion.
The craziest thing about this, which seems to not be seen for how crazy it really is, is the fact that CZ is also to pay the sum of $175 million bail money.
Not only would he pay this bail money, but he would also be required to "return" to the US two weeks before the 23rd of February, 2024, when he'll face a judge for sentencing.
Failure to make himself available by then would attract a $250,000 fine and a sentence of up to 10 years in jail maximum.
You can read Cointelegraph's report on the matter here.
This is one of the craziest things to happen in Crypto history, but most people and outlets who talk about it don't seem to appreciate how crazy it is!
First of all, who pays bail money without being arrested? This means CZ was arrested. If he was arrested, when was he arrested? And why was there never a big headline that read: "CZ arrested"?
Why was the whole arrest thing and the SEC's/DOJ's moves against CZ and Binance kept a secret until now that a resolution has begun?
Just 3 weeks ago, after Sam Bankman-Fried was found guilty, people started to talk about how the SEC and DOJ are going to go for some more high-profile names in the crypto space. This tweet is an example:
But there was no mention of CZ. Meanwhile, from the SEC's petition, it is clear they have been investigating CZ and Binance for a very long time now. Why was everything done so quietly, almost like it was nothing?
Well, we have only one explanation that makes sense, and that is everyone involved agreed to avoid Fear, Uncertainty, and Doubt (FUD).
What a red day it would have been for the entire Crypto market if the headlines ever read all of a sudden that CZ was arrested and that he and Binance were under trial for Money Laundering, violation of the BSA, etc.
What a bloody day it would have been for the market!
Before this incident, CZ was one of the most trustworthy figures in the space. Binance too. Plus, Binance is such a huge exchange. It would have been such a big blow if it got out that these two were now found wanting by the law.
Obviously, it's not public knowledge exactly how the whole arrest, CZ in America, deal negotiations with the DOJ, etc went. But it's almost certain CZ was approached quietly because the guys in charge didn't want to spread FUD.
Either that or it was CZ's own idea to keep things quiet in exchange for his complete cooperation and submission.
I saw a post somewhere that said something along the lines of "Jesus died for your sins, CZ died for your bags", and I found it hilarious, but I couldn't agree more!
CZ gave himself, and played it all cool, not minding how much himself or the company would lose, all in the bid to not make damaging breaking news! All in a bid to not spread FUD.
Look how quietly a case that requires settling with about $4.5 Billion is being settled so quietly, almost like it's nothing. We really dodged a bullet here, because this was supposed to be a mountain, but now it's just an anthill.
Another further thing to rejoice about is the fact that the allegations against Binance do not say user funds are in danger, were mismanaged, or that users were defrauded. Everything is about some US laws and regulations for business operations.
Phew!
[Cover Image from Coinmarketcap]
The End
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