Binance CEO Changpeng Zhao has pleaded guilty to criminal charges and stepped down from the company as part of a $4 billion dollar settlement with the Department of Justice. This dramatic development transpires amidst rising regulatory scrutiny of cryptocurrency exchanges globally.
In the course of unfolding events, According to the Independent, Binance, a Cayman Islands-based company, has been charged with diverting customer funds and concealing the commingling of billions of dollars in investor assets. The company, founded by CEO Changpeng Zhao, has been cooperating with the U.S. Securities and Exchange Commission investigation but chose to act unilaterally and litigate. The cryptocurrency industry has been plagued by scandals and market meltdowns, with Sam Bankman-Fried, the founder of the failed brokerage, convicted of fraud for stealing at least $10 billion.
As per other reliable reports, According to CNBC, Binance, a cryptocurrency exchange, has been charged with violating the Bank Secrecy Act and violating U.S. economic sanctions. The charges follow civil suits brought earlier this year by the Securities and Exchange Commission and the Commodity Futures Trading Commission. In total, 13 charges have been brought against Binance by the SEC. Binance has been under intense regulatory scrutiny, with officials citing concerns over its aggressive market expansion and allegations of money laundering and securities fraud. The SEC has targeted Binance with lawsuits alleging illegal securities exchange operations, mishandling customer funds, and operating as an unauthorized securities exchange, broker, and clearing agency. The SEC has also sued Kraken claiming it commingled $33 billion in customer crypto assets with its own company assets.
Moreover, The CNBC also reports that The UK's Financial Conduct Authority (CFTC) has barred Binance's U.K. unit from operating in the country, citing insufficient regulated activities. The regulator accused Binance, Zhao, and its ex-chief compliance officer, Samuel Lim, of operating an "illegal" exchange and violating the Commodity Exchange Act. Binance and Zhao have filed a motion to dismiss the CFTC's suit while the U.S. exchange is pushing back against the SEC's lawsuit. The SEC claims that several of the tokens Binance and Coinbase offer on their platforms are securities that should have been registered with the agency.
