<\/p>\n
The world\u2019s largest cryptocurrency exchange has been charged with one of the largest corporate penalties in U.S. history.\n<\/p>\n
Cryptocurrency behemoth Binance and its CEO, Changpeng Zhao (CZ), pled guilty to charges of money laundering, settling with the U.S. Department of Justice to pay $4.3B.<\/p>\n
Does it have the cash?<\/p>\n
The company was fined $1.805B, discounted for partial cooperation, payable over 15 months after sentencing. An extra $2.51 billion was tacked on top connected to a wide variety of laws that the company broke \u2013 from lacking anti-money laundering practices to sanctions violations.<\/p>\n
Notwithstanding many prominent crypto figures cheering on the enforcement action, a multi-billion dollar fine poses a threat \u2013 even if the company has months to pay it back. The company might have to sell some of its crypto assets, sparking a drop in prices, just as the industry is gearing up to leave the bear market behind.<\/p>\n
It also triggers FTX-induced fears as to whether the company will dip into customer funds to pay back the significant sum of money. Some call for caution.<\/p>\n
\u201cI think Binance has sufficient balance sheet to pay the fine,\u201d says Nic Carter, a partner at Castle Island Ventures, a VC firm that invests in blockchain-based companies, telling The Defiant that he thinks \u201cthey wouldn\u2019t have settled otherwise.\u201d<\/p>\n
As of writing, Binance\u2019s latest proof-of-reserves<\/a> published on Nov. 7 showcases $76.8B in customer funds versus $83.2B in Binance\u2019s wallets. This translates into a net positive balance of $6.35 billion in favor of the company, of which roughly half sits in a variety of stablecoins<\/a>.<\/p>\n Additionally, as Conor Grogan, director for Coinbase, points out<\/a>, these numbers don\u2019t include off-chain cash balances nor funds held in wallets that might not appear in proof-of-reserve statements. Grogan reckons that the company shouldn\u2019t have any issue paying the penalty to U.S. authorities.<\/p>\n CZ and the company have accepted the criminal charges put forth by the DOJ, FinCEN, CFTC, and OFAC. According to a press conference by authorities yesterday, Binance enabled large-scale crypto transactions from U.S.-based customers to clients in sanctioned countries, along with not enforcing proper anti-money laundering protocols.<\/p>\n Nansen Analytics published its latest update<\/a> Wednesday, highlighting that token holdings for the company have increased to $65.2 billion from $64.6 billion following the coordinated action from U.S. authorities. As of today, that number sits at $65.3 billion.<\/p>\n\n