Binance Legal and Regulatory Challenges Continue on Multiple Fronts

A US District judge has approved Binance’s $4.3 billion plea deal, the latest development in Binance’s legal woes saga. The world’s biggest exchange agreed to admit guilt to criminal charges and announced the deal back in November of last year. The deal also imposed conditions on the exchange’s future operations.

The United States judicial system hasn’t limited itself to taking action against Binance but also its founder. Prosecutors are asking a US court to force Changpeng “CZ” Zhao, who reached a $4 billion settlement in 2023, to surrender his traveling documentation as part of an evaluation of his bail conditions.

The two developments come at a time when governments around the world continue their crackdown on cryptocurrency. Nigerian users, for example, had their trading activity affected last week by what seems as an ongoing effort by the government to ban cryptocurrency. Now, the government seems to have blocked access to major crypto platforms.

Judge Approves Binance’s $4.3 Billion Plea Deal With U.S. Prosecutors

Binance’s $4.3 million plea deal not only made history for its value but also the conditions imposed on the exchange as part of it. The judge in charge, US District Judge Richard Jones, declared that a third party would be monitoring Binance over the next five years.

The firm in charge of monitoring the exchange’s compliance is yet to be determined, but it will be in charge of ensuring Binance complies with anti-money laundering rules and other regulations. According to Bloomberg, New York-based law firm Sullivan & Cromwell is the frontrunner for the position.

The federal judge referred to the plea deal approval by stating it would “promote specific and general deterrence”. He also warmed other financial institutions that “serious consequences” should be expected if they “ seek to break the law under the guise of ‘innovation’”

Binance’s deputy general counsel Josh Eaton said the company implemented multiple “compliance enhancements” over the past years and that it accepted “full responsibility” for its past actions.

More Travel Restrictions for Changpeng Zhao

While the future of Binance’s relationship with the American government is clearer now, the same can’t be said for its founders. Prosecutors are now looking to impose more travel restrictions on Changpeng Zhao, who was already denied permission to travel to the United Arab Emirates last year.

The restrictions come as part of the revision of Zhao’s appearance bond which seeks to change the “special conditions” included in the original bond. The harsher of these conditions would require Zhao to remain in the continental United States until his sentencing, all while reporting all national travels to the government.

Zhao will also be required to “surrender his current Canadian passport” to a third-party custodian who will accompany him on all travels. Other traveling documentation like passports, no matter if expired or not, would be surrendered to the court or Pretrial services. Finally, Zhao would also be obliged to ”maintain his residence as directed”.

Mixed Signals from Nigerian Government Spark Crypto Concerns

Nigerian cryptocurrency users had their trading activity affected last week when they experienced problems connecting to their favorite cryptocurrency platforms. Platforms like Binance, Kucoin, Kraken, and Coinbase had their traffic blocked by national telecom companies by order of the Nigerian Communications Commission (NCC).

The block comes at a time when the Nigerian government seeks to ban cryptocurrency in the country, a move that countries like China have tried in the past. Presidential adviser Bayo Onanuga has repeatedly Tweeted against Binance, claiming that the company “is blatantly setting exchange rate for Nigeria”. He also called for Binance and other companies to be banned.

The Naira-Dollar manipulators

I chanced on an X post Tuesday night by one Brother Bernard @Mikael C Bernard who railed against what he called the order of the EFCC, NSA on Finance to set a cap on traders selling USD tokens for Naira equivalent.

He disclosed that token sellers… pic.twitter.com/c9YBjawJMz

— Bayo Onanuga (@aonanuga1956) February 21, 2024

With many Nigerian users accusing Binance of corroborating with the government, the exchange had to address what it called “unfounded fears or uncertainties.” The exchange explained that foreign exchange rates are “influenced by various complex factors, which Binance has no influence on”, all while reassuring users of its commitment to the Nigerian market.

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