Binance’s biggest traders attending a conference in Singapore this September were informed of the cryptocurrency exchange’s impending agreement with US authorities at a lavish private dinner.
At an exclusive gathering held at the stylish 1880 members-only club, a select group of market makers and traders, dubbed VIPs, gained insight into Binance’s impending legal turmoil amidst a milieu of American Angus beef and Australian truffles. attendees reported for Bloomberg.
Attendees reportedly broke into small groups to question Binance executives about the company’s legal issues, which raised the possibility of a $4 billion fine, and assured them that the company could afford it and would pay it.
According to Bloomberg, Changpeng “CZ” Zhao, now Binance’s former CEO, was noticeably absent, and Richard Teng, who replaced Zhao as CEO last week, was also present but discussed a private meeting. Bloomberg reported that he asked that his identity not be revealed. But the bottom line was that Binance would survive.
A Binance spokesperson told Bloomberg that the depiction of events was inaccurate but declined to specify which aspects were incorrect. Binance did not respond to The Block’s request for comment.
One of the largest business settlements in U.S. history
Two months later, U.S. authorities including the Justice Department, Treasury Department, and Commodity Futures Trading Commission reached a settlement with Binance last week, concluding a criminal investigation into alleged money laundering and sanctions violations. This is one of the largest corporate settlements in the United States. Our history. The settlement included a $4.3 billion fine and included criminal charges against Zhao.
The DOJ has been investigating Binance and its executives over concerns of money laundering and sanctions violations since 2018, and investigations into the company have increased throughout 2023 from additional financial regulators, including a lawsuit filed by the Securities and Exchange Commission in June. . It was not included in the $4.3 billion settlement agreement.
Zhao also agreed to step down as CEO as part of the deal with the DOJ. He pleaded guilty to violating the Bank Secrecy Act and will pay a $50 million fine. Zhao also posted a $175 million personal recognizance bond and could face up to 18 months in prison.
His sentencing is scheduled for February 2024, and he must remain in the United States ahead of the hearing, at least until further review. Zhao faces up to 10 years in prison and a $250,000 fine if he fails to appear in court in February 2024.
CZ’s decision to resign has been known for several months.
Zhao’s absence was not limited to this event. He also missed attending the Binance conference in Istanbul last month, choosing instead to stay near his residence in Dubai, United Arab Emirates. The UAE does not have an extradition agreement with the United States, but Zhao voluntarily flew to the United States last week to attend the hearing.
Zhao has been preparing to resign since May, according to four sources familiar with the conversations during Binance’s leadership call. A potential deal with the Justice Department fell through earlier this year after some officials privately pressured him to seek stiffer penalties, according to a person with direct knowledge of the matter, Bloomberg reported.
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