Binance Under Scrutiny
Binance and its founder CZ violated US laws on money laundering and terror financing, agreeing to pay fines of $4.3 billion.
Law Enforcement Investigations
Binance came under suspicion and was the target of several US law enforcement investigations dating back to 2018.
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Congress Involvement
Binance faced US Congress scrutiny as Senators Elizabeth Warren, Chris Van Hollen, and Roger Marshall sought answers regarding allegations and the company’s balance sheets.
Regulatory Action
The CFTC filed suit against Zhao, Samuel Lim, and Binance, naming seven counts of trading irregularities and market manipulation, with Zhao denying the charges.
DOJ Investigation
Binance was reported to be under investigation by the Justice Department for violating sanctions against Russia.
Securities and Exchange Commission Charges
The SEC filed suit against Binance, Binance.US, and Zhao with 13 charges, leading to cutbacks in Binance’s US activities.
Leadership Exodus
Senior members of Binance.US left the company, marking the start of a wave of departures.
SEC Legal Battle
Binance.US sought a protective order against the SEC, claiming the latter was conducting a “fishing expedition” in its discovery process.
Binance.US Layoffs and SEC Complaint
Binance.US laid off a third of its workforce, and its CEO departed, while the SEC complained about a lack of cooperation from Binance in its discovery process.
Legal Maneuvers
Binance.US scored a minor victory, with the court denying the SEC access to the exchange’s software, and Binance sought to dismiss the SEC case against them.
Indictments and Penalties
The government filed indictments against Binance and Zhao in Washington state, with penalties totaling over $4 billion, including fines imposed on Zhao and Lim personally.
Hot Take
Binance’s and CZ’s violations of US laws on money laundering and terror financing led to legal action and over $4 billion in penalties, marking a transformative chapter for the platform.
