Topline
Binance chief executive Changpeng Zhao agreed to step down from his role on Tuesday and plead guilty to anti-money laundering and sanctions violations as part of a $4 billion settlement with federal regulators—the latest move by U.S. officials this year against major crypto firms.
Timeline
November 21: Changpeng Zhao stepped down as chief executive of Binance and pleaded guilty to anti-money laundering and sanctions violations as part of a $4 billion settlement with the Justice Department, Treasury Department, and Commodity Futures Trading Commission, which claimed the crypto exchange failed to prevent “suspicious transactions with terrorists.”
November 20: The SEC sued Kraken, alleging the cryptocurrency exchange illegally operated without registering as a securities exchange, months after the firm agreed to pay the agency $30 million in penalties and cease offering staking services to U.S. customers after Kraken allegedly failed to register the service under securities law (Kraken said it would “vigorously defend” against the claims).
November 9: FTX founder Sam Bankman-Fried was convicted of multiple fraud and conspiracy charges following allegations that he placed billions of dollars of customer funds into the crypto exchange’s sister trading firm, Alameda Research—four other executives previously pleaded guilty to fraud charges, including Ryan Salame, Nishad Singh, Caroline Ellison and Gary Wang.
October 12: The Federal Trade Commission announced a settlement with crypto lender Voyager Digital—which filed for Chapter 11 bankruptcy last year—that permanently bans the firm from handling consumers’ assets, adding a complaint was filed against Voyager’s former chief executive Stephen Ehrlich alleging he falsely claimed the FDIC insured customer accounts.
July 13: Alex Mashinksy, the former CEO of bankrupt cryptocurrency platform Celsius Network, was charged with securities fraud, commodities fraud, and wire fraud following lawsuits filed against the company by the Commodities Futures Trading Commission, the SEC, and the FTC, which alleges the company tricked consumers into transferring cryptocurrency onto the platform by ensuring deposits would be safe and available.
June 6: The SEC announced charges against Coinbase, alleging the cryptocurrency exchange failed to register as a securities exchange (the firm denied the claims and suggested the SEC did not provide it with a way to be compliant with regulations).
May 12: Do Hyeong Kwon—creator of the stablecoin TerraUSD and its companion token Luna—was released on bail from Montenegrin prison and was later charged with conspiracy to commit commodities, securities, and wire fraud, among other charges, amid allegations by the SEC that Kwon misled investors.
March 29: The crypto exchange Beaxy shut down after it was charged by the SEC with failing to register as a securities exchange amid allegations the company’s founder, Artak Hamazaspyan, misappropriated $900,000 of customer funds for gambling and other personal uses.
March 22: The SEC charged Justin Sun and three of his companies over the sale of the tokens Tronix and BitTorrent, alleging the tokens were not registered as securities—the agency also charged eight celebrities for illegally promoting the tokens, including Akon, Lindsay Lohan, and Lil Yachty.
January 19: Nexo Capital paid the SEC $45 million in fines and fees after the crypto lender—which never admitted to any wrongdoing—was charged with allowing its customers to earn interest on their cryptocurrency savings.
The Justice Department charged on January 18Bitzato and its founder Anatoly Legkodymov over allegations the Hong Kong-based crypto exchange processed more than $700 million in illicit funds and failed to meet U.S. regulations.
January 12: The cryptocurrency lender Genesis Global Capital and the bankrupt crypto exchange Gemini Trust—owned by Cameron and Tyler Winklevoss—were charged by the SEC, alleging the companies offered unregistered securities to investors with the promise of high interest on deposits through a program called Gemini Earn.
Surprising Fact
Bitcoin fell to $19,873 on March 10, the first time the cryptocurrency—the biggest in terms of market cap—fell below $20,000 for the first time since January amid a surge in charges against crypto firms. Bitcoin rebounded to $28,000 by March 29 and reached $37,903 last week, its highest point this year.
Tangent
In March, Silvergate Bank, a prominent player in the crypto banking sector, declared its decision to halt operations and liquidate its assets. This move came amid an ongoing investigation by the Justice Department into the bank’s dealings with FTX and Alameda Research. According to Bloomberg, the bank is not accused of fraud or any wrongdoing. Signature Bank, which also served the cryptocurrency industry, was closed by New York regulators and taken over by the FDIC that same month following a surge of withdrawals that coincided with Silicon Valley Bank’s collapse.
Key Background
Increased scrutiny by federal regulators follows several warnings by SEC Chairman Gary Gensler, who said the “Wild West” crypto market was entirely of “fraud, scams, and abuse.” Gensler indicated investor protection rules that cover equities and derivatives should also apply to crypto exchanges, including a challenged claim that some cryptocurrencies are securities. Crypto firms have argued that current securities laws are incompatible with cryptocurrency, suggesting the SEC is too aggressive. The crypto markets faced challenges last year, witnessing a loss of nearly $2 trillion in market value amid growing concerns about rising inflation and a looming recession. The year they concluded with the downfall of the crypto exchange FTX.
This article was generated with the support of AI and reviewed by an editor. If you would like more information, you can see our T&C.