Crypto Exchange Binance Settles for Billions, CEO Resigns

With the settlement, Binance does not have to suspend operations, alleviating concerns about the future of the exchange.

Regulatory Allegations and Violations

The American stock exchange authority SEC started a lawsuit against Binance and Zhao in June. The crypto platform is accused, among other things, of unregistered securities trading. Zhao publicly stated that American customers could no longer trade via Binance.com, but only via Binance.us. However, according to the SEC, wealthy U.S. clients were still able to trade through Binance.com. The SEC also alleges that the platform secretly funneled billions of dollars from investors to another of Zhao’s companies, further exacerbating the legal troubles faced by Binance.

Consequences and Company Exodus

Binance left the Netherlands in July after De Nederlandsche Bank imposed a fine of 3.3 million euros on the company. The Cayman Islands-based platform offered crypto services in the Netherlands without a license, evading regulatory requirements. The Dutch central bank called this evasion “very serious,” leading to the withdrawal of Binance from the Dutch market. All existing customers were taken over by Dutch competitor Coinmerce.

It is noteworthy that Binance is not the first crypto company to face significant legal and regulatory challenges. Prior to Binance, other prominent industry players such as FTX and Celsius have also encountered financial and legal difficulties, reflecting the intensified scrutiny and legal actions faced by crypto businesses.