2024: Binance’s Make or Break Year – Will CZ Face Jail Time?

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In the ever-evolving landscape of cryptocurrency, one giant stood above the rest: Binance. But in 2023, this titan faced its greatest challenges.  

Founded in 2017 by Changpeng Zhao, Binance quickly soared to the top, dominating nearly 60% of the global crypto trading market. But as we’ll see, with great power comes great scrutiny.

Later, Binance, the world’s largest cryptocurrency exchange, began to face unprecedented challenges. From legal battles with the CFTC and SEC to strategic withdrawals from key markets and a major leadership overhaul, we explore the ripple effects on the global crypto landscape. 

So, join us as we unravel the story of Binance’s resilience, regulatory hurdles, and the quest for compliance in the dynamic world of digital finance.

March 2023: CFTC sues Binance

March 2023 marked the beginning of Binance’s regulatory woes. The  U.S. agency, Commodity Futures and Trading Commission (CFTC), accused Binance and its leaders of breaking U.S. laws. The CFTC claimed that Binance failed to check the identities of its customers. 

This is a big problem as KYC helps prevent money laundering and funding terrorism. These charges suggest that Binance wasn’t following the crucial international rules for financial operations.

Binance Exit From Canada

In May, the exchange had to withdraw from the Canadian market, a decision heavily influenced by new regulations set by the Canadian Securities Administration. This withdrawal was a notable setback, significantly reducing Binance’s footprint in North America.

June 2023: SEC sues Binance

The situation worsened in June when the U.S. SEC took legal action against Changpeng Zhao; the lawsuit encompasses 13 allegations, among them are accusations that Binance manipulated its trading volumes, misused client funds, did not adequately limit access for U.S. customers, and provided inaccurate information about its market monitoring systems.

The ripple effects of these legal challenges were felt globally, leading to Binance’s withdrawal from several European markets and intense scrutiny from regulatory bodies in other countries. These exits not only reduced Binance’s global footprint but also signalled a significant shift in the cryptocurrency trading landscape.

Binance Layoff 

After one month, in July, Binance laid off an eighth of its staff, and several core executives left the company. 

Later, Binance CEO CZ took to X to clarify about the massive layoff, and he said, “As we continuously strive to increase talent density, there are involuntary terminations. This happens in every company. The numbers reported in the news are not correct.” He also said that Binance is still hiring.

November 2023: CZ Resigns

The climax of Binance’s turbulent year came in November, with Zhao pleading guilty to violating the Bank Secrecy Act in a U.S. court. This guilty plea, relating to the failure to implement proper KYC and AML protocols for U.S. customers, resulted in Zhao’s resignation and a $4.3 billion fine imposed on Binance. 

This fine, one of the largest in U.S. history, was accompanied by strict supervisory conditions for the next five years. Zhao’s departure was a momentous shift in the leadership of the crypto giant reflecting the major event of 2023.

So, who is the Next CEO of Binance Exchange?

Next CEO of Binance Exchange

In the wake of these tumultuous events, Richard Teng, a former regulatory official, was appointed as Binance’s new CEO. This leadership change, along with Zhao’s statements and internal communications, hinted at a resilient outlook for Binance. 

Despite the overwhelming challenges and setbacks, there was a sense of cautious optimism about Binance’s ability to navigate through these turbulent times and emerge with a renewed focus on compliance and market leadership.