Binance Coin (BNB), the native token of the Binance cryptocurrency exchange, has experienced a sharp decline of 10% following reports that Binance is preparing to settle criminal charges with the US Department of Justice (DOJ) through a $4.3 billion fine.
Binance CEO To Plead Guilty
The Wall Street Journal has disclosed that Binance CEO Changpeng Zhao (CZ), commonly known as CZ, will plead guilty to violating criminal anti-money laundering requirements.
Concurrently, Binance will also plead guilty to a criminal charge related to anti-money laundering violations, resulting in a significant fine. Furthermore, CZ is expected to step down as CEO, with Richard Teng being considered as a potential successor.
Changpeng Zhao is scheduled to appear before a federal court in Seattle to enter his guilty plea. This crucial legal step can further impact BNB’s price action as investors assess the implications of CZ’s admission of guilt regarding violating anti-money laundering requirements.
The reported settlement involves Binance pleading guilty to a criminal charge related to anti-money laundering violations, leading to a hefty $4.3 billion fine. This substantial sum encompasses payments to settle civil allegations made by regulators.
These developments occur in an increasingly stringent regulatory environment in the cryptocurrency industry. The recent charges brought by the SEC against Kraken further highlight the regulatory scrutiny faced by industry players.
Additionally, market participants anticipate significant enforcement actions by the DOJ, which adds to the atmosphere of uncertainty and apprehension.
Will CZ’s Statement Halt BNB Downtrend?
Despite the shocking revelation surrounding Binance’s leadership and its impact on the crypto community, there may still be hopes for a potential recovery of Binance Coin and the overall crypto market as the case reaches its conclusion.
With CZ reaching a settlement with the US Department of Justice (DOJ) and pleading guilty to criminal charges, the exchange can breathe a sigh of relief, knowing that regulatory agencies have addressed their concerns and potential legal action.
Furthermore, this settlement could be seen as a victory for regulators, particularly in light of the ongoing legal battles between the US Securities and Exchange Commission (SEC) and Ripple Labs, which involve the cryptocurrency XRP.
A favorable outcome in these cases could potentially boost confidence in the broader crypto industry and drive prices higher.
Currently, BNB is trading at $240, showing signs of recovery from its recent drop, which briefly touched $235 but managed to stay above the critical support level of $232.
In further declines, BNB bulls will need to hold the support levels at $228, $217, and $214 to prevent the token from dropping below the critical level of $200.
However, suppose Changpeng Zhao and the new Binance CEO can provide a statement that reassures the community and instills a sense of calm. In that case, it may bring a renewed positive sentiment and potentially halt the current downtrend for BNB.
The unfolding of the situation, the next steps for the exchange, and CZ’s fate remain to be seen. The community and market participants eagerly await further developments and announcements shaping the future of Binance and its native token, BNB.
Featured image from Shutterstock, chart from TradingView.com