Binance CEO CZ.
Changpeng Zhao, better known as CZ, the founder of Binance Holdings Ltd., the largest cryptocurrency exchange in the world, pleaded guilty to money laundering violations on Tuesday, Nov 21, 2023 and agreed to pay a $50 million fine and step down from his role as the company’s chief executive.
According to senior Justice Department officials, Mr. Zhao faces up to 18 months in prison under federal sentencing guidelines, but prosecutors are keeping open the possibility of asking for a stiffer penalty.
CZ’s departure from Binance is expected will trigger some short-term volatility in the cryptocurrency market, but crypto will continue to thrive as more institutional money pours in, predicts Nigel Green - the CEO of deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organizations.
The bullish prediction from Nigel Green comes as the giant cryptocurrency exchange company itself also pleaded guilty and agreed to pay $4.3 billion in fines and restitution to the government as part of its own plea deal with federal prosecutors, according to federal authorities.
Crypto to Weather the Biance Storm
deVere Group CEO Nigel Green explains:
“CZ, until now, has been the most influential and powerful person in crypto. As such, this scandal is going to trigger some short-term volatility in the market as investors digest the news. However, the crypto market will thrive as institutional money is pouring in and we expect it to continue to do so.”
BlackRock, the $9trillion asset manager, alongside WisdomTree, Invesco Galaxy, Wise Origin, VanEck, Bitwise and Valkyrie Digital Assets, have published Bitcoin ETF applications waiting to be approved by the US Securities and Exchange Commission, the SEC.
“We believe that Bitcoin ETFS are an imminent inevitability, and this would help drive crypto prices and mass adoption,” adds Nigel.
Should SEC approval happen, it would be a landmark moment for Bitcoin. The approval by the financial regulator of the world’s largest economy of this spot ETF would show that Bitcoin is, without any question, part of the global mainstream financial system.
Spot ETFs invest directly in underlying assets, typically stocks or bonds, at the current market price (spot price). They aim to replicate the performance of a specific index or asset class by holding a portfolio of the actual securities that make up the index.
Binance Fiasco Another Blow to the Crypto Market
The Binance fiasco is another blow to the crypto market coming hot on the heels of the mega crypto trading asset platform FTX scandal last year. After a month-long trial, a jury recently convicted the FTX founder Sam Bankman-Fried of seven counts of fraud and conspiracy.
“It appears that law enforcement and regulatory authorities worldwide are cracking down on executives and companies as digital currencies in all their forms – crypto and central bank digital currencies (CBDCs) – are set to become increasingly dominant in the international financial system,” says the deVere CEO.
Greater regulatory scrutiny must be championed as digital currencies are set to play an ever-greater role. Cryptocurrencies must come into the regulatory tent and be held to the same standards as the rest of the financial system.
Cryptos are here to stay - and the market is only set to grow. There can be no doubt that regulation of the crypto ecosystem is required and, I believe, it should be a priority.”
“The CZ news is a jaw-dropping blow in many ways, but this moment must now be used as a point of inflection to further shore-up the sector and instil trust and transparency by means of sensible, workable regulation as crypto continues its ascent.”