Connect with us

Hi, what are you looking for?

DOGE0.070.84%SOL19.370.72%USDC1.000.01%BNB287.900.44%AVAX15.990.06%XLM0.080.37%
USDT1.000%XRP0.392.6%BCH121.000.75%DOT5.710.16%ADA0.320.37%LTC85.290.38%
THE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & LifestyleTHE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & Lifestyle

Cryptocurrencies

Cryptocurrencies

Binance sees $956 million in outflows after Zhao steps down to settle US probe

Binance's financial services license - Image of Binance text in front of bitcoin
Creator: Telegad Creator: Telegad
Binance's financial services license - Image of Binance text in front of bitcoin
Creator: Telegad Creator: Telegad

Listen to the article now

Market data indicated that investors withdrew over $956 million from cryptocurrency exchange Binance in the last 24 hours following the resignation of its CEO, Changpeng Zhao, and his potential imprisonment following his guilty plea on Tuesday to resolve an extensive U.S. investigation into illegal funding.

The agreement, which calls for Binance to pay U.S. authorities $4.3 billion, casts doubt on the viability of the biggest cryptocurrency exchange in the world and deals a further blow to an already scandal-plagued sector. Richard Teng, a senior official at Binance who arrived in 2021, has taken Zhao’s post, the business announced.

On Wednesday, it was still unclear how much jail time Zhao would spend or how much influence he would have going forward as a key shareholder and founder of Binance under the deal’s conditions.

Analysts also pointed out that the transaction was not expected to fix the exchange’s legal issues in the United States since the Securities and Exchange Commission’s claims that Binance violated securities laws in the country remain unresolved.

“Binance has not entirely emerged from the trees. The exchange is still concerned about the pending civil litigation with the SEC, which is likely to result in further fines, according to Robert Le, a crypto analyst at data firm PitchBook.

Bitcoin movements are not included in the data from the crypto analytics platform Nansen. However, it does show that some investors were concerned about the news and withdrew $956 million from the exchange. However, according to Nansen, the withdrawals were negligible compared to the more than $65 billion in assets still on Binance.

Authorities said that Binance avoided necessary checks that Zhao thought would alienate users in its quest for market supremacy. More than 100,000 questionable transactions went unreported, including those with entities the U.S. designated as terrorists, such as the Palestinian militant organization Hamas. Transactions with websites that sold materials for child sexual abuse were also never reported.

Binance did not immediately answer a request for comment, but on Tuesday, it said it has put a lot of effort into making Binance “safer and even more secure.” On Wednesday, demands for a response from Zhao’s attorneys went unanswered. He acknowledged it on Tuesday, saying, “I made mistakes, and I must accept responsibility.”

PRISON TERMINATION

Although Zhao and Binance have been under investigation by regulators since at least 2018, Zhao’s departure is a significant change for one of the most influential people in the cryptocurrency space. In a Seattle court on Tuesday, Zhao, a resident of the United Arab Emirates (UAE), entered his plea.

According to federal standards, he faces a maximum jail term of eighteen months and has consented not to appeal any sentence up to that duration. On Wednesday, a Justice Department official stated that prosecutors would decide how much jail time to seek closer to Zhao’s sentencing hearing in Seattle on February 23.

“But we reserve the right to seek a sentence above the guidelines.” According to a court document, Zhao posted a $175 million bail bond, with an additional $15 million being kept in a trust account. Fourteen days before his punishment, he consented to return to the United States.

On Wednesday, Reuters was unable to determine his location quickly. Zhao’s attorneys stated during the hearing on Tuesday that he would stay in the Seattle region until Monday night and then be allowed to travel to the United Arab Emirates if the district court did not object to his arrangement with the government, according to a second DOJ official.

Later on Wednesday, despite Zhao’s bail restrictions, federal prosecutors asked a federal judge to prevent him from leaving the country before his February sentence, arguing in a court document that Zhao posed a substantial risk of escaping.

For sentence, the prosecutors stated that “no combination of conditions sufficient to protect against the risk of flight and ensure Zhao’s return” was available.

A few legal experts, citing the plea of guilty to anti-money laundering charges by Arthur Hayes, the former CEO of cryptocurrency exchange BitMEX, expressed their belief that Zhao would not serve more than a year in prison, if any.

Despite the government’s request for a jail term, Hayes was finally sentenced to six months of home arrest in 2022. Other high-ranking BitMEX officials who were charged avoided jail time.

But Sam Bankman-Fried, the creator of FTX, may spend decades behind bars after being found guilty this month of scamming users of his now-defunct cryptocurrency exchange.

Legal experts stated that prosecutors had to consider the possibility that Zhao would have gone overseas to evade capture, even though they might have prosecuted him with more severe offenses carrying more extended penalties based on the claimed circumstances.

“It’s not laughable that the CEO pleaded guilty,” stated Daniel Silva, a partner at Buchalter Law Group and a former federal prosecutor.

In addition, the settlement forbids Zhao from having “any present or future involvement in operating or managing” Binance, the business he founded in 2017 and has held tightly since. He said on Tuesday that he will be “available to the team to consult as needed, consistent” with the agreement, and he is still a significant stakeholder.

Yesha Yadav, a Vanderbilt University law professor, emailed Reuters, saying, “This could give him a hook on which to exercise control—through the usual corporate governance channels (e.g., shareholder voting).”


Comment Template

You May Also Like

Business

Bitcoin Unveiled: Essential Cryptocurrency Jargon Explained for Beginners The article provides explanations for key terms associated with cryptocurrencies for those who may be unfamiliar...

Business

Small Business Marketing With Limited Time and Resources Thriving Against the Odds: The Ultimate Guide to Small Business Marketing on a Tight Schedule and...

Business

Strategic Online Coaching Presence: Your Expertise, Our Strategy: Elevate Your Online Coaching Business with Powerful Marketing Tactics Key Takeaways: Identify your target audience and...

Business

Small Business Success Stories: Big Impact, Small Budget: Unleashing the Power of Local Marketing for Small Businesses Key Takeaways: Build strong connections with your...

Notice: The Biznob uses cookies to provide necessary website functionality, improve your experience and analyze our traffic. By using our website, you agree to our Privacy Policy and our Cookie Policy.

Ok