It was just like a regular crypto Tuesday when the news of CZ stepping down hit the ground, well many didn't see it coming but some of us did.
Binance is a large exchange and ever since they couldn't solidify their foot in the US, I had always knew it was only a matter of time before the SEC pin them down with something. And yes it did come through.
Centralized exchanges are like you defeating the essence of the creation of Bitcoin, it was made to put the power of finance in your hands, not in a central authority to keep and control for you.
We have seen a lot of issues with centralized exchanges lately, the decentralized ones are not left out but have somehow proven to be safer.
Like every other person, greed is also part of the making of the Binance executive and the quest for more profits clouded their judgements and made them do that also aided their growth to this stage.
It is great news that CZ is stepping down to face the consequences of his mistakes, if only SBF had done the same, when the funds were still recoverable, but alas greed corrupts the human mind like a virus would do to a computer.
The SEC has leveled various accusations against CZ and Binance as a whole entity, some of which include;
According to the DoJ
- Binance facilitated more than $900M in transactions between US and Iranian users (a country which the US has strict sanctions against).
- Accepted more than $100M in deposits from dark marketplace, Hydra.
- Accepted $270M in deposits from the now outlawed ‘Best Mixer’ crypto mixing platform.
“It pretended to comply”
- According to the DoJ, Binance lied about its non-compliant behaviour.
- Despite promising to restrict US users from using the unregistered Binance exchange, it continued to allow some of its highest-volume American users to transact on the platform.
- Binance employees even encouraged said users to conceal their US connections and make new accounts.
- CZ himself is reported to have said “Better to ask forgiveness than permission”.
- Binance simply changed its user category “US”, to read “UNKWN” in an attempt to hide its US usership.
“Using new technology to break the law does not make you a disruptor, it makes you a criminal”
- Treasury Secretary Janet Yellen further pointed to the exchange’s “Consistent and egregious violations”.
Child abuse and Terrorism, according to Yellen, Binance supported
- Child sex abuse.
- The drug and narcotic industry.
- Various terrorist groups (including Al Qaeda and ISIS).
- Despite this, the exchange never filed for any suspicious activity.
Binance to face further scrutiny
- The exchange will continue to operate, but will be subject to further examination.
- It will be examined by a third party which will have access to effectively all of Binance’s internal dealings.
- This will continue for a 5 year period.
- It will also be required to report all instances of historical suspicious activity to-date.
- The Treasury wants to
“Ensure Binance’s complete exit from the United states”.
- According to Secretary Yellen. The Treasury is “Sending a message to the virtual currency industry more broadly”. Specifically, that it must “play by the rules” as the Treasury “is prepared to use all of its tools”.
According the news, CZ will have to step down from the helm of affairs for a period of 3 years, so we may likely see CZ coming back on stage as the CEO of Binance. But for now, he is just going to be making moves behind the scene and be somewhere accessible for the company's consultantion.
CZ has been on the forefront for pushing adoption of cryptocurrency, or should I say he has been pushing his business fervently, many will have reasons to stop believing in cryptocurrency if his exchange eventually goes down because of this news.
Coinbase CEO has expressed excitement for CZ coming out to confess to his crimes as this according to him will push for better regulation in the Blockchain industry.
