How Uncertainties Engulfing Binance Could Impact Crypto’s Future
Binance came under scrutiny earlier this year when the US Department of Justice, along with the Commodity Futures Trading Commission, cracked down on the exchange’s lack of regulatory and legal mechanisms to prevent transactions made for illegal purposes, as per the agencies.
On Tuesday, Changpeng Zhao, the chief executive officer of the world’s largest cryptocurrency exchange, pleaded guilty and agreed on a settlement worth $4.3 billion. The chaos engulfing the company now is expected to have broad implications for the future of crypto.
Binance’s Response To Allegations
As per authorities, Binance broke US anti-money laundering and sanctions laws and failed to report tens of thousands of suspicious transactions with organisations the US has described as terrorist entities, including Hamas and al Qaeda, Reuters reported.
Additionally, the exchange has also failed to report transactions with websites devoted to selling child sexual abuse materials and was one of the largest recipients of ransomware proceeds, according to the report. What has been Binance’s response to the allegations?
The company noted: “When Binance first launched, it did not have compliance controls adequate for the company that it was quickly becoming, and it should have. Binance grew at an extremely fast pace … and made misguided decisions along the way.”
“Regulatory Clarity” Need Of The Hour
A report by CNN featured industry experts who mentioned the conclusion of this case should mark a more regulatory-focused approach by the American institutions. And KYC is something that could become a norm in the near future.
Taking to X, previously known as Twitter, Binance competitor Coinbase’s CEO Brian Armstrong highlighted the need to follow the rule of law. “My hope is that today’s news serves as a catalyst to finally achieve [regulatory clarity],” he added.