Hot news report - CZ resigns, Binance settles, another major step forward in compliance

Just yesterday, we reported the news that Binance was fined $4 billion. At that time, the discussion on the Internet was still just joking "How long will it take for Binance to earn back $4 billion?" Unexpectedly, only half a day later, the news of "CZ resigned and pleaded guilty, Binance reached a settlement with the US Department of Justice" came out, which is sad. Let's take a look at the timeline of the development of the matter:

Timeline:
- 11.21
- In the early morning, Bloomberg reported: The US Department of Justice is seeking more than $4 billion from Binance as part of a solution to its years-long investigation into the world's largest cryptocurrency exchange. According to people familiar with the situation, the negotiations between the Department of Justice and Binance include the possibility that its founder CZ may face criminal charges in the United States as part of an agreement to resolve investigations into suspected money laundering, bank fraud and sanctions violations.

- 23:55, Bloomberg reported: The US Department of Justice will announce a settlement with Binance at a press conference tomorrow (4:00 a.m. Beijing time).
——Bloomberg analysts believe that if Binance reaches a settlement with the US Department of Justice, it can be seen as a positive for the industry

- 11.22
- 00:25, Reuters reported that US authorities will reach an agreement with Binance to resolve allegations related to anti-money laundering compliance and other violations.

- 00:55, Forbes quoted people familiar with the matter as saying that Binance CEO CZ may resign from the position of Binance CEO after the settlement agreement is reached, which is part of the $4 billion settlement. This settlement will involve the CFTC, and the SEC is not involved.

- 01:23, US regulators will impose a total fine of $4.368 billion on Binance, including $3.4 billion from the US Treasury Department FINCEN (Financial Crimes Enforcement Bureau) and $968 million from OFAC (Office of Foreign Assets Control). CZ has agreed to resign and plead guilty to violating anti-money laundering regulations, and will not be allowed to hold an executive position in Binance, but he will still retain a majority stake in Binance. CZ will appear in federal court in Seattle on Tuesday afternoon local time.

- 02:25, the prosecutor in charge of this case said: Binance agreed to the US criminal fine of about $1.81 billion on the trading platform, which will be paid within 15 months. In addition, Binance agreed to confiscate $2.51 billion in assets. CZ has also agreed to the court's proposal to pay a $50 million fine to the CFTC.

- 04:46, CZ published an open letter on the X platform, and Richard Teng, head of Binance's global regional market, took over as Binance CEO.
——The original text is as follows: "Today, I resigned as CEO of Binance. It is true that it is not easy to let go emotionally. But I know it is the right thing to do. I made mistakes and I must take responsibility. This is the best for our community, for Binance, and for myself...
I am pleased to announce that our current global regional market head Richard Teng has been appointed as the new CEO of Binance today.
Richard is a highly qualified leader with more than three decades of financial services and regulatory experience, and he will lead the company into the next stage of growth. He will ensure that Binance delivers on our promises in the next stage of security, transparency, compliance and growth."

- 05:16, Binance's new CEO Richard Teng issued an open letter: The focus of work will be to maintain user confidence, cooperate with regulators and promote the popularization of Web3

- 06:09, Binance issued an announcement: A solution was reached with US regulators, and the settlement agreement does not involve misappropriation of funds or market manipulation.
——"Today we are pleased to inform that we have reached solutions with the U.S. Department of Justice, the Commodity Futures Trading Commission, the Office of Foreign Assets Control, and the Financial Crimes Enforcement Network regarding their investigations into historical registration, compliance, and sanctions issues. These solutions acknowledge our company's responsibility for historical criminal compliance violations and allow our company to open a new chapter of learning and growth that is challenging but also highly transformational.
It is worth noting that in our settlement with the U.S. agencies, they did not accuse Binance of misappropriating any user funds, nor did they accuse Binance of engaging in any market manipulation."

- 07:18, Bloomberg: CZ's sentence is expected to be no more than 18 months.
-CZ could have faced up to 10 years in prison, but under the plea agreement, he is expected to be sentenced to no more than 18 months in prison. The U.S. Department of Justice has not yet decided how long they will seek to sentence him to.

- 08:23, CZ's personal bail is $175 million. He will be allowed to live in the UAE while awaiting sentencing. CZ's plea agreement shows that his expected sentence is 10 to 16 months.

- CZ has been released on a $175 million personal bond. The sentencing hearing is scheduled for 9:00 Pacific Time on February 23, 2024 (1:00 Beijing Time on February 24).

When the news of the "4 billion fine" was first exposed, I believe many people were just waiting for the follow-up. In just six hours, the follow-up of "resignation-confession-acceptance-succession-settlement" exploded quickly, which should have caught everyone by surprise.

It is worth noting that the US SEC is not included in the settlement agency this time, which means that this settlement is only for Binance's compliance handling. "Whether the tokens sold are securities" has not been completely resolved, and this issue will be the core of the SEC's case with Binance, https://t.co/s1jQiEXZ43 and Coinbase.

In response, Binance co-founder He Yi said: "Fortunately, fortunately, our early compliance was not good enough, and we had to be punished for making mistakes. Binance did not touch user money and did not manipulate the market. It is still a good kid if it is compliant. This is not against Binance. There was Bitmex before, and now it is Binance. Sit in a row, one by one. Have confidence in Binance's profitability. For so many years, we have lived within our means. Richard has been in Binance for 2 years. Just do it normally in compliance. Now it is very rigorous. The SEC is a civil lawsuit, and the lawsuit will be fought slowly, just like Ripple."

Under the influence of this storm for 6 hours, the price of $BNB fell from a high of 273.3 USDT to 229 USDT, a 24-hour drop of 13.45%. $BNB's daily trading volume is 4.061 million pieces, and the daily trading volume is 1.004 billion USDT, setting a new high since November 2022.

The incident has basically been "settled" at this point. Regarding the resignation of CZ, the leader of the Crypto industry, many KOLs have also expressed: Thank you CZ for your outstanding contribution to the industry, which also means that the industry will usher in a new beginning:

Sun Yuchen: CZ, I have known you for almost ten years. In these ten years, you have been playing a leading role for the community, the industry, and me. In the past six years, you founded Binance and pushed the industry to unprecedented heights. Without you, the cryptocurrency industry would not have reached today's height.

Shenyu: The regulatory settlement agreement reached between the U.S. Department of Justice and Binance has paved the way for ETFs. Thank you CZ for your outstanding contribution to the industry. Let us explore the infinite possibilities of DeFi together!

Element founder @wangfeng_0128: It can be seen from the time when he and He Yi led the team to leave China to develop Binance. We also saw it from his insistence on Binance Chain, from his direct confrontation with SBF and FTX, and from Binance's insistence that it was fine. A company that has been in business for more than six years has been surrounded by ups and downs since its first day.
…
I believe Binance will be fine, and I hope that Binance's next step can be more efficient, transparent and open.

Coinbase founder @brian_armstrong: Today's news makes us more convinced that "head-on" is the right decision. We now have the opportunity to open a new chapter for this industry. Our operations in the United States have been affected a lot by the lack of clear regulation, and I hope today's news can be a catalyst to finally achieve this goal. Americans should not go to unregulated exchanges abroad to benefit from this technology. This industry should be established in the United States, in a compliant manner, and in accordance with US law. We will stay in the United States because we believe in economic freedom and believe that the American democratic system will eventually make this right. Decentralization and cryptocurrency are a powerful tool to update the financial system and build a global economy with more economic freedom. We are just getting started.

Matrixport: More exchanges will strengthen their compliance programs and become part of surveillance sharing agreements, which will help approve spot Bitcoin ETFs in the United States. With this plea agreement, expectations for spot Bitcoin ETFs may have been raised to 100% as the entire industry will be forced to comply with the rules that traditional financial companies must follow. More importantly, this industry clean-up will strengthen the case for institutional investors to adopt Bitcoin and may make Bitcoin a safe-haven asset in investors' portfolios. Institutions are coming, and all enforcement actions by US agencies this year are a step in this direction. As the macro environment continues to provide favorable conditions and institutional demand, 2024 is likely to be another strong year for Bitcoin - Zhao Changpeng may return during the next bear market in 2026.

Supplementary report:
Just this afternoon at 2 o'clock, OpenAI said that it had reached an agreement in principle that Sam Altman would return to OpenAI as CEO and form a new board of directors, including Bret Taylor (Chairman), Larry Summers and Adam D'Angelo.