Santa or Uncle Sam? CZ's Crypto Carol Takes a Dark Turn

"The message here should be clear: Using new technology to break the law does not make you a disruptor. It makes you a criminal."
Commodity Futures Trading Commission chairman Rostin Behnam

He sees you when you're sleeping, he sees you when you're awake, he knows if you've been good or bad... and takes the gift away... I might have messed up a bit with this famous Christmas song verse here, but I'm gradually starting to realize that Santa is actually "Uncle Sam." And Uncle Sam sees everything.

Binance has been under close supervision in the US since probably 2018, and to some extent, CZ managed to play the role of a compliant crypto exchange CEO quite well, until they caught him. Or better said, until they no longer accepted his game and dethroned him.

CZ has fallen from the throne of one of the most influential crypto people to just a rich individual who at the moment risks spending 18 months in jail, will have to pay something like $150 million in fines, while dragging Binance into paying $4.3 billion as a settlement plea deal for... For what?

Well...

Binance agreed to plead guilty to violating the Bank Secrecy Act, knowingly failing to register as a money transmitting business, and willfully violating the International Emergency Economic Powers Act, Attorney General Merrick B. Garland said. CEO Changpeng Zhao also pled guilty to willfully violating the Bank Secrecy Act and stepped down.

"From the very beginning, Zhao and other Binance executives engaged in a deliberate and calculated effort to profit from the U.S. market without implementing the controls required by U.S. law," Garland said, adding that the exchange enabled transactions between American users and sanctioned entities.

Specifically, Garland said Binance facilitated $900 million in transactions between U.S. and Iranian users, while also supporting transactions between U.S. users and entities in Syria and in the Russian-occupied Ukrainian regions of Crimea, Donetsk and Luhansk.
source

I bet many terrorists and Russian oligarchs will, for sure, miss CZ and his company's benevolence in facilitating crypto transactions that were deemed "illegal" or under embargo. I believe in free money; thus, I consider that terrorists should have the same right as we do in sending crypto across blockchains.

Don't tell me that as of now terrorism will be eradicated because Binance will no longer facilitate crypto transactions between terrorist groups and their sponsors. After all, I won't believe it. The CIA funded terrorism too, so when the state wants to fund terrorism, and it is usually that certain states do most of the funding, they will find a way to do that.

CZ played his part well in portraying himself as an unshakable and fair crypto boss, but when he came out recently and pleaded guilty for all these accusations mentioned a few paragraphs above, he kind of took a shit on all his image and charisma. There are two ways of doing what he did: you either bribe the authorities and make sure you can get away with your shit, or you die like a cowboy...

He did none of these; he pretended to comply, believing that he would fool authorities, and somehow "melted away" like a clown. I have stated a few times on my blog and will say it again: I don't like when crypto companies are too compliant. Cuz that's not what crypto is about. But then again, without all these products such as futures and all the money laundering acceptances that Binance indulged in, CZ would have not been a multi-billionaire today.

Why didn't the CFTC do its show earlier, if they say they had their eyes on CZ since 2018? Well, we were almost all expecting something to happen with Binance in the US and its CEO, but after seeing Ripple winning the case, most of us also thought the Chinese will get away. Looks like he didn't...

And there's a reason why... Binance is Chinese, Binance as a Chinese originated company cannot thrive in the US. The US is about to approve several Bitcoin spot ETFs, a couple of them belonging to BlackRock, and the custodial service to be used for the Bitcoin that gets bought for these ETFs will be Coinbase.

Coinbase is an American company; BlackRock owns stocks in Coinbase, Vanguard has the higher share of stocks in Coinbase, something like 12% if I'm not mistaken, and BlackRock owns shares in Vanguard and vice versa. So, the conclusion is that Binance had to go down so that BlackRock, Coinbase, and other American companies have more control over Bitcoin in America and cash in more of the generated revenues from such business.

Binance is not dead, will, for sure, stay resilient, but Binance will never be the same. There's something positive about this whole situation, and that is the fact that DEXs are soaring as more and more CEXs go down and rotten retail's trust in them. Crypto, at the end of the day, is about decentralization, circumvention, and disruption and not about compliance and surveillance.

The industry somehow needed for this epic show to happen so that DeFi can properly soar and challenge traditional trading companies and exchanges. 2024 is going to be an interesting year, and Bitcoin will melt a lot of faces in the years to come. Don't forget to take profits, though, cuz there will be a bear market for sure after the bubble bursts. Same shit every cycle...

Thanks for your attention,
Adrian