Court unseals indictments against Binance and CZ, detailing expected guilty pleas
A federal court has released the indictments against Binance and CEO Changpeng “CZ” Zhao filed under seal on Nov. 14, in which the United States government said it expected the cryptocurrency exchange and CZ to enter guilty pleas.
In Nov. 14 filings in the U.S. District Court for the Western District of Washington at Seattle, the U.S. government said it requested to file the indictments against Binance and CZ under seal, as any potential plea deals with the exchange and CEO and any regulatory settlements were “likely to have a major effect on the company, its customers, and global cryptocurrency markets.” Authorities charged CZ with one felony count for failure to maintain an effective Anti-Money Laundering program at Binance, violating the Bank Secrecy Act.
“On the day of the plea hearings, the Government anticipates that the criminal resolutions with Defendant Zhao and Defendant Binance will be announced simultaneously with significant civil resolutions by the U.S. Department of the Treasury Office of Foreign Assets Control [OFAC], the U.S. Department of the Treasury Financial Crimes Enforcement Network [FinCEN], and the Commodity Futures Trading Commission [CFTC],” said the Nov. 14 filing, adding:
“While Binance is not a publicly traded company, Binance is the largest cryptocurrency exchange in the world and news related to Zhao and Binance’s criminal and civil liability is likely to have a significant effect on trading of various cryptocurrencies.”
“Cryptocurrency markets are volatile, subject to significant swings based on external events,” said the filing. “Here, given the status that Binance and Zhao have among participants in the cryptocurrency and related markets, even the simple docketing of a federal criminal case against either would by itself have a significant market impact.”
The government compared potential volatility in the price of BNB (BNB) to that of FTX Token (FTT) when the crypto exchange collapsed in November 2022 and former CEO Sam “SBF” Bankman-Fried was indicted on federal fraud charges. SBF was subsequently found guilty on seven charges and awaits sentencing in March 2024.
According to court records, lawyers representing Binance and CZ appeared in court for separate hearings scheduled on the morning of Nov. 21 to discuss pleas and possible detention. Attorneys for CZ filed sealed motions concerning the Binance CEO’s conditional release pending sentencing in the case, but the contents were not available at the time of publication.
Related: Binance $3.9B USDT move gains community attention amid DOJ settlement claims
A settlement for many of the criminal and civil cases against Binance and CZ in the United States is expected to be announced at 8:00 pm UTC on Nov. 21 as part of a joint statement by the Justice Department, CFTC, and Department of the Treasury. According to many reports, CZ has agreed to plead guilty, and Binance will pay more than $4 billion as part of the settlement.
It’s unclear at the time of publication if any part of the announcement will concern Binance’s pending civil case with the U.S. Securities and Exchange Commission. In June, the regulator filed 13 charges against the crypto exchange, Binance.US and CZ for securities law violations.
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Politics
Starmer was aware of the risks of appointing the ‘Prince of Darkness’ as his man in Washington – to an extent
It was a prescient and – as it turned out – incredibly optimistic sign off from Peter Mandelson after eight years as Chancellor of Manchester Metropolitan University.
“I hope I survive in my next job for at least half that period”, the Financial Times reported him as saying – with a smile.
As something of a serial sackee from government posts, we know Sir Keir Starmer was, to an extent, aware of the risks of appointing the ‘Prince of Darkness’ as his man in Washington.
But in his first interview since he gave the ambassador his marching orders, the prime minister said if he had “known then what I know now” then he would not have given him the job.
For many Labour MPs, this will do little to answer questions about the slips in political judgement that led Downing Street down this disastrous alleyway.
Like the rest of the world, Sir Keir Starmer did know of Lord Mandelson’s friendship with the paedophile Jeffrey Epstein when he sent him to Washington.
The business secretary spelt out the reasoning for that over the weekend saying that the government judged it “worth the risk”.
Keir Starmer welcomes Nato Secretary General Mark Rutte to Downing Street.
Pic: PA
This is somewhat problematic.
As you now have a government which – after being elected on the promise to restore high standards – appears to be admitting that previous indiscretions can be overlooked if the cause is important enough.
Package that up with other scandals that have resulted in departures – Louise Haigh, Tulip Siddiq, Angela Rayner – and you start to get a stink that becomes hard to shift.
But more than that, the events of the last week again demonstrate an apparent lack of ability in government to see round corners and deal with crises before they start knocking lumps out of the Prime Minister.
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‘Had I known then, what I know now, I’d have never appointed him’ Starmer said.
Remember, for many the cardinal sin here was not necessarily the original appointment of Mandelson (while eyebrows were raised at the time, there was nowhere near the scale of outrage we’ve had in the last week with many career diplomats even agreeing the with logic of the choice) but the fact that Sir Keir walked into PMQs and gave the ambassador his full throated backing when it was becoming clear to many around Westminster that he simply wouldn’t be able to stay in post.
The explanation from Downing Street is essentially that a process was playing out, and you shouldn’t sack an ambassador based on a media enquiry alone.
But good process doesn’t always align with good politics.
Something this barrister-turned-politician may now be finding out the hard way.
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