Lisa Braganca Discusses Binance Case on “Squawk Box”
Lisa Braganca, a former U.S. SEC branch chief, appeared on CNBC’s “Squawk Box” to discuss the criminal investigation into Binance following founder Changpeng Zhao’s guilty plea to money laundering charges. She explored the implications of this case for the broader cryptocurrency industry.
Implications of the Binance Case
Braganca emphasized the gravity of felony exposure for major players in the cryptocurrency industry and expressed significant concern over Changpeng Zhao’s casual approach to anti-money laundering regulations.
Compliance in the Crypto Industry
During the interview, Braganca highlighted the surprising lack of compliance among major players in the crypto industry and pointed out that even large entities like Kraken are facing new charges. She contrasted this with Coinbase, which has not faced similar allegations, suggesting that more established Wall Street players may enter the crypto space as a result.
Regulatory Impact and Legal Actions
Braganca also mentioned that there’s a belief that these legal actions could pave the way for the approval of Bitcoin ETFs by the SEC, leading to a more regulated and standardized industry.
Effects on CZ’s Case
Braganca noted the stark difference in legal outcomes between CZ’s case and that of Sam Bankman-Fried, attributing CZ’s relatively lighter penalty to his cooperation and plea agreement with the government.
Binance’s Legal Process
Braganca also noted the practical aspects of the legal process, including the potential for Binance to tie up resources in prolonged litigation and CZ’s residence in the United Arab Emirates, which lacks an extradition treaty with the U.S.
Brian Armstrong Reacts to Binance and CZ’s Guilty Plea
Following Binance and its former CEO CZ’s guilty plea, Brian Armstrong, Co-Founder and CEO of Coinbase, spoke with CNBC’s Kate Rooney. Binance agreed to a settlement exceeding $4 billion with the Justice Department for various violations, while CZ admitted to shortcomings in Binance’s anti-money laundering measures, leading to his resignation as CEO.
The Importance of Compliance
Armstrong discussed Coinbase’s commitment to compliance, acknowledging the necessity of adhering to AML and KYC regulations, emphasizing the importance of fair competition in the sector.
Crypto Transactions and Compliance
Responding to concerns about cryptocurrencies being used for illegal activities, Armstrong cited data showing that less than 1% of crypto transactions are illicit, compared to around 4% for cash transactions in U.S. dollars, emphasizing the importance of robust monitoring systems.
Regulatory Guidelines and Adoption of Cryptocurrency
Armstrong discussed the need for more precise regulatory guidelines, especially regarding the classification of certain cryptocurrencies as commodities or securities and expressed optimism about the U.S. establishing definitive regulations and the transformative potential of cryptocurrency in making the financial system more efficient, equitable, and inclusive.
Hot Take
Lisa Braganca and Brian Armstrong both highlight the urgent need for stronger compliance measures in the cryptocurrency industry and anticipate regulatory changes that will shape the future of the market.
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