Analyzing the case of CZ resigning from Binance, a shock before the crypto bull run.

In the early morning hours of November 22, 2023, big news broke out that shook the crypto industry. It quickly became a hot topic. That is the news that Changpeng Zhao (CZ) has announced his resignation from being the CEO of Binance - the world's number 1 Crypto Exchange that he created and managed for more than 6 years. For this reason, many people were shocked by this news. very much So what was the reason that made CZ have to make this decision?

The matter began in March 2023 when the US Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance. Alleging that Binance that it provided an “illegal” cryptocurrency exchange to U.S. citizens, and that it knowingly circumvented U.S. law.

This could be considered the beginning of a crackdown by US authorities on Binance, with Changpeng Zhao (CZ), CEO of Binance at the time, being the accused.

The story dragged on for more than 8 months until it was concluded by the Department of Justice (DOJ) or the US Department of Justice. It has offered conditions in exchange for resolving the lawsuit. The content is as follows:

• Binance must pay $4,300 billion in fines US$3,400 billion belongs to the Financial Crimes Enforcement Network (FinCEN) and US$968 million to the Office of Foreign Assets Control (OFAC).
• CZ must step down as CEO and be banned from management for three years. There is also the possibility of being imprisoned for a period of 18 months.

CZ has now admitted to allegations related to Binance's non-compliance with U.S. anti-money laundering laws as part of an agreement with the Department of Justice. This decision to step down is deemed necessary to facilitate independent investigations over the next three years. The primary accusation is money laundering stemming from Binance's failure to conduct Know Your Customer (KYC) in 2017, making it a channel for illegal funds from terrorist groups , drug trafficking networks, and sanctioned countries.

Binance will be able to continue operating without CZ by appointing a new CEO, Richard Teng , who has over 30 years of experience in regulatory roles. This makes him a suitable candidate to lead the company. Richard Teng previously served as CEO of the Financial Services Regulatory Authority at Abu Dhabi Global Market (ADGM), Chief Regulatory Officer of the Singapore Exchange (SGX), and Director of Corporate Finance at the Monetary Authority of Singapore (MAS).

Furthermore, CZ emphasized that Binance is not facing charges of "misuse of client funds " like other exchanges that have collapsed, and " is not involved in price manipulation," which should alleviate some concerns for Binance clients.

This event impacted the overall crypto market, causing Bitcoin's price to plummet by over 4.69% and directly affecting Binance's BNB, causing its price to drop by more than 10.9% immediately. This is believed to be due to investor fears about a potential domino effect. However, the market is now calming down and prices have rebounded by more than 3.08%, indicating a easing of market anxiety.

However, people are still concerned about the safety of their money deposited on exchanges. This has led some customers to withdraw assets worth approximately $1,000 billion in the past 24 hours. This amount is relatively small, representing only 1.5% of all assets held on Binance.

Regarding industry confidence in CZ, the view has become more positive. Some have stated, " He is a hero who accepted punishment so that the industry could move forward. " Binance's investigation confirmed that he did not misuse client funds illegally. This is why Binance maintains a high level of trust in the industry.

In the end, people thought that this would be the last bad news before the crypto market Everyone will enter a full upward trend. Still confident in Binance. As for CZ, even though they no longer have a management position, But they are still shareholders.

So what will the future of Binance be like from now on?

From an analyst's perspective, this is a very positive factor for long-term operations. This incident is like CZ finally getting his act together, preventing serious problems in the future, even if it comes at the cost of a relatively severe penalty. Binance's future movements should be smoother, but may face increased obstacles due to the increased regulatory control, potentially slowing down its actions compared to before. However, this is compensated by an improved level of credibility.

Binance Global will continue to operate. As for Binance-TH by Gulf-Binance, which plans to launch in early 2024, it is expected to continue operating according to the original plan without change. Because the various documents processed with the Regulator in Thailand are in order, it is expected that in early 2024 it will be open for users to use the service.

However, the market's response to the news suggests that this incident is not much of a concern compared to previous crises, which have seen similar incidents in the past where Bitmex's CEO resigned following lawsuits. But in the end, the market did not fall sharply and the overall market continued to improve.

Therefore, it can be concluded that this will be a positive factor as there will be no more serious news coming to the market and Binance still has the confidence of people. In the industry as usual But it is still worth following to see if other exchanges will be sued like big brother Binance or not? And how will the verdict of the Coinbase, Kraken and Tether lawsuit end? Please follow the news closely!!

Analysis by

Mr. Aphinat Dechdonbom, Analyst at CryptoMind Advisory Co., Ltd.

Mr. Nattapong Chuasawan, Analyst at CryptoMind Advisory Co., Ltd.

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