Binance.US has made it clear that it is distinct from its parent company, stating that it operates independently and is not involved in the recent enforcement settlements against Binance and its Former CEO, Changpeng Zhao. The exchange has emphasized that it is compliant with US regulations despite sharing technology with Binance.
In light of the recent developments, Zhao has stepped down from his position as Chairman of Binance.US's Board of Directors. This decision involves transferring voting rights and relinquishing governance.
According to a statement issued by the company on X (formerly Twitter), Binance.US has expressed gratitude for CZ's important role in guiding the platform. Norman Reed, the new CEO of Binance.US, will continue to lead the crypto exchange.
SEC Investigations, CZ's Legal Battles, and Penalties
Currently, the Securities and Exchange Commission (SEC) is investigating Binance and Zhao. The regulator is probing alleged control of Binance’s affiliate in the US by the global crypto exchange. Binance.US faces ongoing regulatory actions from the SEC regarding alleged unregistered securities offerings to US investors.
Meanwhile, a federal judge in the US has issued a rulingrestricting CZ's return to the UAE. Judge Richard Jones suspended a decision to allow CZ to travel to the UAE until a ruling is made following his guilty plea for anti-money laundering and US sanctions violations.
We wanted to provide an update to the https://t.co/AZwoBOgsqS community in light of last week’s news regarding CZ and https://t.co/IZwa5M2U8b.As you know, https://t.co/AZwoBOgsqS was launched with the express purpose of serving United States customers in accordance with all…
— Binance.US ???????? (@BinanceUS) November 28, 2023
CZ's plea deal includes a bond of $175 million, secured by $15 million in cash, to ensure he appears for sentencing. Despite stepping down as Binance's CEO, CZ faces a potential maximum prison term of 10 years, which is expected to be reduced to 18 months, and a $50 million fine.
Separately, Binance admitted guilt, agreeing to pay $4.3 billion in penalties. The exchange faces civil lawsuits, including one involving celebrity endorsers like Cristiano Ronaldo, Jimmy Butler, Graham Stephan, and Ben Armstrong.
Binance's Multi-Front Enforcement Actions
Binance agreed to pay over $7.1 billion in combined settlements to the US Department of Justice and the Commodity Futures Trading Commission.
In addition to the financial penalties, Zhao and the Former Chief Compliance Officer, Samuel Lim, face civil monetary penalties. The exchange will exit the US and comply with stringent sanctions obligations, subject to monitoring for five years.
The settlement does not encompass the charges brought by the SEC, indicating an impending legal battle unless a separate settlement is reached.
Zhao acknowledged his mistakes, while Binance emphasized efforts toward user protection and compliance. Richard Teng, the exchange's Former Head of Regional Markets, took the helm as the new CEO.
This article was written by Jared Kirui at www.financemagnates.com.
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