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On a Binance Settlement, U.S. government agencies devoted extensive time, spanning months to years, to thoroughly investigate Binance before unveiling a formal indictment against the cryptocurrency exchange. Both Binance and its founder, Changpeng “CZ” Zhao, have acknowledged violations of United States laws related to money laundering and terrorism financing, resulting in an agreement to pay fines totaling $4.3 billion.
The Department of Justice initiated its inquiry into Binance several years earlier, And with simultaneous actions by other U.S. regulatory bodies during this interim period.
Binance Settlement: CFTC and SEC Lawsuits, Leadership Changes, and Investigations
On March 27 and May 5 CFTC files charges, DOJ investigates Binance
The Commodity Futures Trading Commission (CFTC) filed a lawsuit against Zhao, Chief Compliance Officer Samuel Lim, and Binance, citing seven counts of trading irregularities and market manipulation. Simultaneously, the Justice Department investigated Binance for potential violations of sanctions against Russia. Maintaining a presence in the country until September.
Then in June 5 The Securities and Exchange Commission (SEC) filed a lawsuit on June 5 against Binance, Binance.US, and Zhao, encompassing 13 charges, including unregistered securities sales, allowing U.S. customers access to the Binance exchange, commingling customer and corporate funds, and wash sales.
On July 6 Four senior members of the Binance.US team departed, initiating a series of departures over subsequent months.
Reports suggested that the Justice Department contemplated fraud charges against Binance Aug. 2. To prevent a potential run on the exchange, the department leaned towards imposing fines or non-prosecution agreements at that time.
Also Read: Changpeng Zhao resigned from CEO Role at Binance
On Aug 14 Binance.US sought a protective order against the SEC, alleging a “fishing expedition” in its discovery process. Binance insisted it was acting in good faith.
After that in the time between Sept. 13-14 Binance.US laid off approximately one-third of its workforce, around 100 people, and its CEO Brian Shroder resigned. The SEC expressed dissatisfaction with Binance’s lack of cooperation in the discovery process.
Legal Maneuvers and Repercussions: Binance’s Strategic Moves Amidst Regulatory Challenges
following Binance Settlement On Sept. 19 Binance.US achieved a minor victory when the court denied the SEC access to the exchange’s software, suggesting that the SEC should be more specific in its discovery requests.
And after that on Sept. 21 Zhao, Binance, and Binance.US requested the court to dismiss the SEC case against them, alleging misinterpretation of securities law and retroactive imposition of authority by the SEC.
Binance filed a motion to dismiss the CFTC’s suit on Oct. 23. contending that a ruling in favor of the CFTC would grant it excessive regulatory authority over global cryptocurrency activities related to derivatives products.
Then After that Zhao’s position in the Bloomberg Billionaires Index dropped significantly, prompting Congress to call for Department of Justice intervention. His personal wealth underwent a substantial reduction.
On Nov. 14 Indictments against Binance and Zhao were filed in Washington state on Nov. 14, with the documents unsealed on Nov. 21. As part of the agreement, Zhao stepped away from his role at Binance.
