Binance Fined $4.3 Billion and CEO Pleads GUILTY!

Binance agrees to pay $4.3 billion and Their CEO has pled guilty to violating Money laundering rules and has stepped Down claiming quote I make mistakes and I must take responsibility now in Exchange for a king's Ransom and the King's head the doj is expected to Settle their criminal investigation with Binance some think this is the end for The world's largest crypto exchange Others believe it's a glorified speeding Ticket that's a net win for crypto but What should you believe it depends on How much you trust binance let me Explain first context for the past year There's been criminal and civil Investigations into binance with the SEC Doj and cftc all investigating Accusations of binance accepting us Investors while not being regulated and Then trying to hide that fact why would They do that well according to their CEO Chang Pang Zhao who I'll be calling CZ Quote if we blocked us users from day One binance will not be as big as we are Today it's better to ask for forgiveness Than permission so uh money is the Answer to why they did something illegal It's always the answer right this is Because as CZ claims 20 to 30% of Binance's potential Revenue was from the US market so no wonder they kept us Investors but after years of No Control CZ eventually acknowledge the risk of

Allowing us customers he says quote we Do need to block by IP and also know Your customer now this might seem like a Step in the right direction except for a Critical decision CZ maintained a subset Of valuable us users on binance Basically they kicked off the broke People to look good but conspired to Keep their high value clients quote Contacting us VIP users offline through Direct phone calls leaving no trace the VIP team would allegedly register a new Separate account for an offshore entity While the user transferred their Holdings to the new account so it would Look like that person was no longer from The US according to CZ himself the Company had to be very careful to skirt The line using careful language quote we Cannot say they are us users and we want To help them we say we miscategorized Them as us users but actually they are Not so that's bad but it actually gets Worse see the new filing from the doj Shows these problems extended beyond the US to binance outright allowing money Launderers to move money through their Platform One compliance employee even Wrote quote we need a banner is washing Drug money too hard these days come to Binance we got C for you uh what an Example of this was when Hydra a popular Russian Dark Net Marketplace transferred $106 million in Bitcoin to binance.com

And laundered their money through it but Not only did binance have little to no Money laundering controls in place even When illegal funds were found binance Would make special exceptions for their VIPs in one example example a user was Told to be careful with his flow of Funds especially from darket like Hydra He can come back with a new account but This current one has to go it's tainted But what is the point of flagging money Laundering if you're just going to tell The guy to start a new account and try Harder next time to not get caught and I Bring these issues up not just because They're pertinent to the settlement Which they are but also because these Issues demonstrate a problem binance Might have moving forward setting a side For a moment this $4.3 billion fine part Of this agreement is the expectation Binance is going to stop these illegal Activities you know clean up their act Have an independence compliance monitor For 3 years but you have to ask yourself Was binance so large and attractive to Crypto people in spite of its loose Money laundering controls offshore Unregulated status or was it because of It what percentage of binance's Revenue Vanishes overnight with increased Scrutiny I don't know the answer but it certainly Isn't zero and speaking of challenges

Binance faces now let's put the $4.3 Billion find back on the table which Itself is a problem can binance afford To pay it without dipping into customers Funds and becoming insolvent well once Again it depends on how much you believe Binance see binance regularly publishes A proof of reserves which shows they Have customer assets backed one to one And billions of dollars on top of it According to those yeah it's a drop in The bucket But proof of reserves don't fully show Liabilities causing people to call for a Full audit for years now but each time It's met with a less than satisfactory Response from their CEO thus far uh you Haven't disclosed your liabilities and I Wonder why that is and whether you Will yeah so we are working with firms To do the U audit of financials like Liabilities ETA but audits don't reveal Every problem so But would reveal that CZ if you could Get a big four auditor to say that if if You're saying that some of them don't Want to work with you that raises Questions too they don't want to work With you because you don't have the Files and the data that would make them Feel comfortable signing off and and Giving that stamp of Approval uh actually many of them don't Even know how to audit crypto exchanges

Um they don't they don't they don't Really when they so when they audit They're very used to auditing or firm Does coin coin has reses coin has a big Four Auditor um actually I'm I don't look at Coinbase we don't really look at so Though now hold on wait a second or You're saying you can't get an audit but Then refuse to acknowledge that your Competitors are working with Auditors That's a red flag and it's pretty clear Look we just don't know the full story And I don't bring this up like as a Boogeyman to scare you for no reason Telling you there's a monster under your Bed maybe you know it's something you Legitimately need to think about about If you have money on binance how much do You trust binance is telling the truth And trust them with your money it's Ultimately up to you for me I've always Told you guys keep your money off these Exchanges because what you don't know Can hurt you just listen to binance's CEO answer questions about his company's Ability to pay steep fines earlier this Year and ask yourself does he sound Confident would you be able to handle it If somebody asked you for 2.1 billion Dollar back would that be okay would you Be able to still withstand things we're Financially okay including you have $2.1 Billion to give away if somebody T to

Recw to claw that back you'd still be Fine we'll let the lawyers handle it our We are financially strong honestly the Right answer is yes we're financially Strong is just not good enough it's Literally one of those answers that Means nothing and by the way the real Fine is double that so especially in Light of that large layoff at the Company earlier this year I'm personally Not optimistic about binance's future Although as I said without a more Detailed look at their finances maybe From an auditor we can't know for sure But whether or not you're personally Optimistic or pessimistic I think There's one thing we can all come Together and learn from on this story Questions concern skepticism of a Company it's not fud it's basic due Diligence and the crypto industry has a Troubling trend of pretending otherwise Earlier this year CZ started dismissing Fud fake news attacks with the number Four like he would just post pictures of Himself Whenever there were problems at Binance and just do do this as if it Magically warded off problems so to see That same guy less than 12 months later Pleading guilty to charges it has a Level of embarrassment that I've almost Never seen before I say almost because Technically I saw this piece of media on The most humble billionaire the day

Before that from from the same guy who Also made the Sam bankman freed puff Piece and it's definitely worse than Than this uh so as we put Cy On The Wall Of Shame joining many other crypto People I want to leave you with this Wonderful piece of cringe and as always Thanks for [Music] Watching hey this is the richest guy in The world from crypto and you don't even Know him hi my name is CZ he made over $60 billion but his mom still called him Stupid let me tell you his incredible Story

Leave a Comment