Wednesday, 28 February 2024

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Why Binance’s US plea deal could be positive for crypto adoption

Why Binance’s US plea deal could be positive for crypto adoption

Many predicted that Binance would never embrace regulation — it would only pretend to comply in jurisdictions like the United States. 

No more.

Binance pleading guilty to money laundering and other federal charges on Nov. 21 means it’s giving up its free-booting ways. It will also pay a $4.3 billion fine, the largest in the history of the U.S. Treasury Department.

Moreover, Binance’s founder, CEO and principal owner Changpeng “CZ” Zhao — deemed by many the most powerful individual in crypto — will be sidelined from the firm for at least three years after the naming of a court-appointed monitor.

But those may not even be the most important effects.

“The settlement is a lot bigger than that,” Yesha Yadav, Milton R. Underwood chair, professor of law and associate dean at Vanderbilt University Law School, told Cointelegraph, adding:

“It will bring some systematic oversight to Binance by virtue of a monitorship agreement, signaling the end of an era where the exchange has been able to operate in a relatively borderless way, without headquarters and seemingly without a major domestic regulator.”

It will subject Binance to more “scrutiny over its products, risk management, governance, trading partnerships and compliance rigor” than it’s ever experienced before, Yadav continued, and the exchange will probably undergo significant structural reform to put it on a more compliant footing.

The agreement, which Binance reached with the U.S. Department of Justice (DOJ), the Treasury Department and the Commodity Futures Trading Commission (CFTC), should have industry-wide consequences — and not necessarily negative, either.

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Indeed, the deal is a “long-term positive” for the cryptocurrency and blockchain industry, according to Austin Campbell, founder and managing partner at Zero Knowledge Consulting and adjunct professor at Columbia University’s School of Business. He told Cointelegraph:

“This is an acknowledgment that crypto is here to stay, and people should have access to it.” 

It is arguably a monumental event for the industry, in part,…

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