- The Department of Justice charged Binance entities for skirting US laws.
- Community members blasted the sentence as evidence of the DOJ’s oppression of the crypto industry.
- Crypto markets held steady despite the momentous news.
US regulators have intensified their enforcement actions against centralized crypto exchanges, aiming to impose stricter oversight on the industry. After years of observing the meteoric growth of cryptocurrencies from the sidelines, authorities have now set their sights on the sector, with some labeling the campaign as a “War on Crypto.”
The latest flashpoint in the ongoing regulatory crackdown came when the US Department of Justice (DoJ) charged Binance, its US subsidiary, and founder Changpeng ‘CZ’ Zhao with violating money laundering and sanctions rules. The move sparked a backlash from the crypto community, which has voiced concerns that the DoJ’s actions mark a continuation of crypto industry oppression.
The Crypto Community Reacts
Responding to the action against Binance, Ryan Adams of the Bankless Podcast fired off an 𝕏 post detailing his opinion on the oppressive nature of the DoJ’s penalties. Adams opined that going after Binance represents a means of forcing compliance and bringing cryptocurrency under the authorities’ control.
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“They not trying to kill crypto. They're trying to control it. The lawsuits, the fines, the arrests - all this is to show crypto who's boss,” explained Adams.
Despite the dark nature of his words, Adams ended his message on a positive note, stating that trying to control crypto will only make it stronger. To that end “Crypto is winning,” claimed Adams.
ShapeShift founder and anti-establishment advocate Erik Voorhees praised Binance’s efforts to onboard new users and drive the industry forward. Voorhees called CZ a frontline hero, adding that he should be proud of what he has accomplished with the company.
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Meanwhile, Coinbase CEO Brian Armstrong believes that diligently sticking with compliance and the rule of law, while harder, slower, and more expensive, should be the only approach a crypto company takes. Despite the perceived injustice of the “War on Crypto,” Armstrong holds hope that US authorities “will eventually get this right.”
Allegations that Binance companies and CZ had failed to abide by US laws have landed the company in hot water as the Department of Justice announced its verdict after a year’s long investigation.
Department of Justice Charges Binance
On November 21, the DoJ held a public conference regarding accusations that Binance entities had violated US laws by facilitating billions of dollars of unregulated crypto transactions, including to users in sanctioned countries as well as enabling criminality on its platforms.
During the conference, US Treasury Secretary Janet Yellen told the crypto industry that if they wish to be a part of the US financial system, they must “play by the rules.” Failure to do so will result in “action” on the part of US authorities.
For its part in not playing by the rules, Binance agreed to pay a $4.3 billion settlement and to withdraw from the US market. CZ stated that the deal cut with US authorities means they dropped allegations that Binance had misappropriated user funds and was involved in market manipulation, implying the company is free to continue operating in other jurisdictions.
However, CZ stepped down as Binance CEO and was replaced by the company’s former head of region markets Richard Teng.
On the Flipside
- The markets reacted with minimal outflows, while Bitcoin held $35,600 support.
- Crypto regulation remains a patchwork globally, complicating compliance for multinational organizations.
- Despite sanctioning Iran since 1979, the US government recently authorized releasing $10 billion in Iranian funds to facilitate electricity payments. This exception highlights the unilateral power America wields to dictate sanction policy.
Why This Matters
Despite the seriousness of skirting US laws, CZ has become a resistance icon by absorbing regulatory blows to keep Binance going. His perceived sacrifice is seen as keeping crypto idealism alive, even as authorities continue to tighten controls.
Learn more about the market reaction to the Binance enforcement action here:
Market Conflicted as CZ Quits and Binance Settles with DOJ
Discover what is happening with DeFi TVL inflows here:
DeFi TVL Up 34% in a Month Suggesting Crypto Winter Thawing
