In November 2022, FTX collapsed, and Sam Bankman-Fried’s road to ruin began. The crypto market at the time was already on a route, down -66% from its August 2021 all-time highs. 📺
CZs tweet in November 2022 triggered another wipeout in crypto, with the total market cap dropping -27.5% over seventeen days, extending the total loss from the all-time high to -76%.
In one year, two things: tried SBF and found him guilty. Then they pulled off a somewhat less dramatic but nonetheless major takedown (via massive fines and settlement) of Binance and its now former CEO, CZ.
According to the presser released by the DOJ, here’s a quick rundown of what went down:
- Binance Pleads Guilty: Binance Holdings Limited pleaded guilty to anti-money laundering, unlicensed money transmitting, and sanctions violations.
- Historic Penalty: Binance agreed to pay over $4 billion to resolve the Justice Department’s investigation, marking one of the largest corporate penalties in U.S. history.
- CEO’s Guilty Plea: Changpeng Zhao, Binance’s CEO, also pleaded guilty to failing to maintain an effective anti-money laundering program and resigned as CEO.
- Coordinated Resolutions: The plea is part of coordinated resolutions with the Department of Treasury’s FinCEN, OFAC, and the U.S. Commodity Futures Trading Commission (CFTC).
- Attorney General’s Statement: Attorney General Merrick B. Garland emphasized that Binance’s rise was partly due to its criminal activities and stressed the consequences of using technology to break the law.
- Treasury Secretary’s Remarks: Janet L. Yellen highlighted Binance’s willful legal failures, allowing money to flow to terrorists and other criminals through its platform.
- Deputy Attorney General’s Warning: Deputy Attorney General Lisa O. Monaco warned crypto and DeFi companies about the importance of complying with U.S. law.
- Intentional Violations: Binance and Zhao willfully violated anti-money laundering and sanctions laws, threatening U.S. financial systems and national security.
- Binance’s Growth Strategy: Binance prioritized growth and profits over compliance, knowingly operating without anti-money laundering safeguards and allowing illegal transactions.
- Forfeiture and Fine: Binance agreed to forfeit $2.51 billion and pay a criminal fine of $1.81 billion, totaling a financial penalty of $4.31 billion. They also agreed to retain an independent compliance monitor for three years and enhance their anti-money laundering and sanctions compliance programs.
- Zhao’s Role: Zhao admitted to prioritizing Binance’s growth over compliance, causing illegal transactions, and failing to implement effective anti-money laundering protocols. 📻
A few hours after the Binance and CZ news came out, Coinbase’s CEO, Brian Armstrong, took to X:
From the perspective of gaining, keeping, and acquiring the US crypto customer base, Coinbase is sitting pretty nicely right now.