CEO Binance CZ Pleads Guilty: Future of BNB

Binance is the world’s largest crypto exchange by volume and
its founder and ex-CEO Changpeng Zhao, aka CZ, is facing serious legal
challenges for some notorious transactions on Binance. On November 21, 2023, CZ
stepped down from his position after he pleaded guilty to money laundering
charges by US Security and Exchange Commission (SEC) and Commodity Futures
Trading Commission (CFTC). Binance has to pay heavy fines and comply with US
laws. This has created a sort of uncertainty about the future of Binance and
Binance Coin BNB.

Why did CZ leave Binance?

CZ founded Binance in 2017 and became a titan behind Binance
by making it the top cryptocurrency exchange. Binance builds an entire ecosystem
around it. Binance Smart Chain emerged as a faster and more efficient
blockchain where developers can use different tools to build their dApps and
offer crypto tokens.

It offered a native crypto token Binance Coin BNB which is
now among the top 5 coins in the crypto space with respect to marketcap. NFTs,
games, crypto academy, Binance earn, Binance DEX, Binance Web3 wallet, and
whatnot – Binance became one of the richest ecosystems in the blockchain world.
BNB coin had an all-time high price of $690.93 in May 2021 when Bitcoin was at
its peak price.

As Binance flourished it attracted regulatory eyes towards
itself as it was hard to comply as blockchain is still an infant product. Binance
is charged for unregistered operations, money laundering, violating security
laws, and endangering investors. Following this, it was banned in many
countries including the UK, Japan, Germany, Italy, Singapore, Thailand, Hong
Kong, Canada, and the US.

On November 21, 2023, CZ was booked by the court where he
pleaded guilty and was sentenced to 18 months in jail starting from February
2024 if the appeal fails. However, he was later released on a $175 million
appearance bond. The bond included some additional cash and collateral as well.

CASH or COLLATERAL:

• $175 million personal recognizance bond.
• $15 million held in DWT trust account.
• Property pledged by FRP: No property must
  be posted as security with the court, but the owner(s) must complete and sign
  an Agreement to Forfeit Property form…
• Guarantor #1 – $250,000
• Guarantor #2 – $100,000

Overall, Binance had agreed to pay a fine of $4.3 billion,
the highest fine in the history of the US.

Binance exchange holds $6.7 billion worth of assets. So, does any of this impact the crypto market? I guess, No. Does it impact the Binance ecosystem? It could but things get clearer as new leadership takes the decisions. Does this kill BNB? This is very unlikely to happen – and I have reasons to support this.

Past Precedents of SEC and Crypto:

• In 2019 Bitfinex and Tether, both linked to the
  same person, faced legal troubles. Both had to pay an $18.5 million fine to the
  SEC.
• In 2020, the US SEC and CFTC charged BitMex
  crypto exchange for anti-money laundering charges. BitMex had to pay $100
  million in fines and comply with the regulations and laws of the authorities.
• SEC recently sent legal notice to the Kraken
  cryptocurrency exchange and it could be the next in line facing legal actions.

Future of BNB Coin:

Richard Ting is the new CEO of Binance replacing CZ in his
new role. Richard Ting was been Chief regulatory officer at the Singapore
Exchange (SGX), the Country’s exchange, and Derivatives markets in 2010. Richard
has been involved in making listing rules, risk management systems, and
securities trading rules. He relocated to Abu Dhabi in 2015.

Here, he was appointed CEO of the Financial Services Regulatory Authority (FSRA) at the free-zone and international financial hub Abu Dhabi Global Market (ADGM).

In August 2021, Richard joined Binance as the CEO of Binance
Singapore with new responsibilities like expanding Binance operations and
complying with the local laws. Richard taking the top spot in Binance is a
positive indication he is a man with sound background. This means that overall,
we can expect the Binance ecosystem to flourish in the future. But the case
with crypto coins is always different as a little FUD can kill an entire
project.

The settlement agreement between Binance and the US
regulators also has significant implications for the future of BNB, the native
token of Binance. The news of ChangPeng Zhao pleading guilty increased the
volatility of BNB price but it recovered very soon as the impact was not very
negative. One of the reasons for such a positive reaction could be CZ stepping
down as CEO in time.

The green vertical area in the above chart shows the market
reaction to the news which was a mix of red and green candles. However, the
small drop from the yellow region is because Bitcoin prices dipped a bit during
that period. The yellow region is the value area for BNB price. The coin is
struggling to re-enter this region.

This positive reaction of the BNB community to the news is
because people constructively took the settlement. The settlement between
Binance and SEC increase the legitimacy and accessibility of Binance products
including BNB in the US and other markets. The settlement could also enhance
the utility and functionality of BNB, as it would enable Binance to offer more
compliant and innovative products and services that use BNB as a payment or
reward mechanism.

Takeaway:

The price of BNB is slowly strengthening after a minor blow
and the legal action against Binance doesn’t impact the future of BNB in any
way. CZ might see some challenges in the near future, however, since he is not
a part of Binance anymore, this shouldn’t impact its ecosystem. Binance's new
CEO has a strong history of compliance and regulations. This should help
Binance complies with the regulations and targets a wider audience including the
US and other countries.