The cryptocurrency community on social media has largely reacted positively to the recent agreement between Binance, its CEO Changpeng “CZ” Zhao, and the United States Department of Justice (DOJ). Many are hopeful that this settlement will clear one of the final hurdles for the much-anticipated approval of a spot Bitcoin exchange-traded fund (ETF).
The settlement, amounting to $4.3 billion, resolves allegations of Binance violating U.S. Anti-Money Laundering laws. As part of the agreement, CZ has consented to resign from his role as CEO of the world’s largest crypto exchange.
Following the announcement of this deal and CZ’s subsequent resignation, the market experienced a significant adjustment, resulting in the liquidation of approximately $175 million in leveraged cryptocurrency positions. Additionally, nearly $1 billion in crypto assets were withdrawn from Binance. Despite this market reaction, the majority of the crypto community views the DOJ settlement and CZ’s plea agreement as a positive development for both the exchange and the broader crypto industry. This sentiment counters previous concerns that the U.S. government’s actions against Binance might undermine the exchange’s market dominance.
Many are now speculating that this settlement with the DOJ could be the final step before the U.S. Securities and Exchange Commission (SEC) greenlights a spot Bitcoin ETF. The general consensus in the crypto community is that this deal represents a win-win situation for the crypto ecosystem and could be a bullish signal for the next market upswing.
However, not everyone shares this optimistic outlook. Some in the crypto community remain cautious, pointing out that Binance is still awaiting potential action from the SEC, and that the exchange might face a tougher challenge if the SEC opts not to settle. While the SEC’s lawsuit is civil in nature, analysts believe that the DOJ settlement significantly reduces the largest impediment to initiating a new bull market in the crypto space.
Comparisons have also been drawn between Binance’s settlement with the DOJ and the BitMEX case, where former CEO Arthur Hayes pleaded guilty to violating Anti-Money Laundering laws and subsequently stepped down. Hayes received a two-year probation sentence, avoiding a potential six to 12-month prison term.
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