CEFIREGULATION

The Wall Street Journal: The Department of Justice has been investigating Binance for a year, CZ may face criminal charges and fines of billions of dollars.

share
The Wall Street Journal: The Department of Justice has been investigating Binance for a year, CZ may face criminal charges and fines of billions of dollars.

The Wall Street Journal published an article titled "The World's Biggest Crypto Firm is Melting Down," discussing a series of crises at Binance. The article also cited information from several anonymous sources, and Binance founder Zhao Changpeng CZ did not provide a direct response to the report.

FTX Collapses, Binance Faces Crisis

The Wall Street Journal details recent challenges faced by Binance, including:

  • More than ten executives have resigned in the past three months

  • At least 1,500 employees have been laid off

  • Binance's trading volume has plummeted

Industry Insiders: Anticipating Binance's Collapse

Industry insiders point out that due to its massive scale, Binance's developments will have a significant impact on the crypto market. If Binance were to collapse, its market share would be filled by other exchanges, but the "short-term market liquidity" may disappear, leading to a significant drop in tokens.

A institutional trader told The Wall Street Journal that their company has conducted drills to quickly withdraw assets from Binance in the event of a market collapse.

Partner at Innovating Capital also noted:

The impact of Binance's disappearance on the industry is immeasurable, as Binance has been driving significant innovation and growth.

US Department of Justice Has Been Investigating Binance for a Year

Insiders revealed that the US Department of Justice has been investigating Binance for a year, which could lead to criminal charges against Binance and CEO Changpeng Zhao, as well as fines in the billions of US dollars.

Reports also indicated that Zhao has been hiring new lawyers behind the scenes to handle the case with the US Department of Justice and has been staying at his home in the United Arab Emirates, a country without an extradition treaty with the US.

A source stated that the pressure from the US Department of Justice prompted Binance to scale back its operations in Russia. Binance subsequently banned users from using sanctioned banks, dismissed Russian business executives, and is considering a complete exit from the Russian market.

Is Zhao Changpeng's Resignation the Solution to Legal Issues?

The Wall Street Journal cited documents stating that Brian Shroder, former CEO of Binance.US who resigned in mid-September, mentioned in an online meeting that the exchange's revenue has dropped by 70%.

He addressed the disheartened executives:

Zhao Changpeng needs to address regulatory issues, place his shares in trust or sell them, to ensure smooth relations with banks and obtain licenses for Binance US to maintain growth momentum.

Insiders pointed out that there are ongoing discussions within Binance about whether Zhao Changpeng should step down. Zhao's continued leadership of the company has disheartened executives, who believe that Zhao's departure would improve the company's chances of survival.

Former Binance Employees: Dismissed Without Notice

Reports indicated that employees confronted Zhao Changpeng in a meeting following the layoffs.

The employees stated:

Some terminated employees had no notice period, and only found out they were laid off when they couldn't log into the system. They were only given two weeks of severance pay. Is this treatment disrespectful?

A Binance.US spokesperson declined to comment.

CZ seemed to have noticed The Wall Street Journal's report, stating that he is even too lazy to respond to FUD, but he specifically screenshotted another Wall Street Journal article, finding it difficult to understand why The Wall Street Journal referred to SBF as a savior.