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Bitcoin Holds Strong at $37K Amid Binance Controversy, CEO Pleads Guilty

Bitcoin Holds Strong at $37K Amid Binance Controversy, CEO Pleads Guilty

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Key Takeaways

  • Both Binance and its CEO Changpeng Zhao plead guilty to federal charges
  • Up to $4.3 billion to be paid in fines to the Department of Justice

Crypto Controversy

Bitcoin casually shook off a brief dip to $35,000 to bounce back, making itself comfortable at $37.5k Thursday morning. The momentary hiccup comes off the back of Binance and its (now former) CEO Changpeng Zhao pleading guilty to several federal charges. Despite somewhat expected selling pressure stemming from the legal developments, the digital asset managed to weather the storm and emerge mostly unscathed. 

In a game of legal dodgeball, disgraced Binance founder Changpeng Zhao, commonly known as CZ, just about managed to avoid becoming a cellmate of the notorious FTX founder Sam Bankman-Fried. 

After years of scrutiny by the US Department of Justice (DOJ), the popular crypto exchange found itself at the center of legal controversy, now being charged with three criminal counts including conspiracy, money laundering, and sanctions violations. Following the hard-hitting news, Binance users were quick to protect themselves, pulling more than $1 billion from the platform. 

The more recent DOJ filings were the straw that broke the camel’s back, prompting Zhao to leave his post as Binance’s CEO, on top of pleading guilty to the charges in an arrangement made with the Justice Department.  A hefty $4.3 billion fine sweetened the deal (at least for the DOJ). 

The cracks started to show back in June when the US Securities and Exchange Commission (SEC) printed a press release specifying 13 separate charges against the exchange. The charges included accusations of operating unregistered exchanges, misrepresenting trading controls, and the unregistered offer and sale of securities – to name a few.

The statement reported that Binance and its entities willingly put their client’s assets at risk “in an effort to maximize their own profits” in a “calculated evasion of the law”. The copy also claims that Zhao had messaged a colleague regarding their bending of US rules, stating that they were operating as an ”unlicensed securities exchange in the USA bro” – making it very clear that Zhao knew the rules, he just didn’t care to follow them. 

The question remains – what does the future hold for the world’s largest crypto exchange? In a statement released by Binance, they’re hoping to “turn the page” to a new chapter. For now, it looks like the crypto scene is entering a whole new era – one where governments are taking more control.

Crypto Outlook

With all of the recent legal bloodbaths Bitcoin has found itself in the middle of, it has shown a remarkable amount of resilience. At the moment, the forecast for the token looks bright and sunny. Due to the crypto’s inherent volatility, it’s impossible to truly predict any future price changes. That being said, there are a few different ways December can go as November draws to a close. Investors hold out hope for a “Santa Claus Rally”, where there’s an uptick in digital assets over the seasonal period, instead of freezing in a ”Crypto Winter”, crypto’s very own version of a bear market. 

For traders, the trading week will be cut short due to Thanksgiving. US markets will be closed Thursday in observance of the holiday. On top of that, markets will also be closing earlier than usual on Friday, giving traders a well-deserved long weekend to rest and a chance to refine their strategy going into 2024.