Binance Bids for CryptoTulip Honors

robertmcgrath

Nov 30

Binance was once the crypto exchange. Operating everywhere, with 150 million (!) reported customers and billions in assets, Binance never even pretended to care about US or other regulators.

This fall, Binance is on fire and adrift, after multiple lethal hits below the waterline from US and other regulators.

CZ himself forked over $135B (a record), plus $800M other penalties and faces possible prison time. Binance will also pay FinCen and OFAC over $4B, and will stop doing business in the US entirely [1].

There is still a similar SEC action pending, so there may be more to come. I'm not sure how many other cases may be pending around the world.

Ouch!

As one headline asks, "can Binance survive?" [3] We'll see.

It seems to me that Binance has demonstrated that the powers-that-be can, in fact, regulate cryptocurrency exchanges, regardless of the alleged affordances of blockchain technology and the fervent avowals of Nakamotoans everywhere.

How, then, can Binance 2023 not be a leading candidate for the Crypto Tulip of the Year Award?

For my money, the best part, the icing on this cake, was the individual punishment of the Chief Compliance Officer, Samuel Lim. For his role in the crimes, he will pay a fine and leave the company and industry [2].

It is unusual to punish a compliance officer for individual behavior. But in this case egregious misbehavior, massive and deliberate non-compliance, was orchestrated by the so-called "compliance" officer. I think the arrogance and insult of the job title was probably too much for the authorities to let pass.

For this action alone, Binance and the US DoJ deserve a special CryptoTulip citation, no?