In a recent news report, Binance and its Chief executive official, Changpeng Zhao, are allegedly liable to face criminal charges in the ongoing investigation by the United States Department of Justice. In another report, The Wall Street Journal asserted that the Binance empire is under threat, causing murmurs in the crypto community.
Binance, the world-leading crypto exchange, is currently facing multiple challenges from ambiguous crypto regulations enforced by some countries, especially in the United States of America. According to the report, the Department of Justice of the United States is currently running an investigation that speculators suggested could result in a criminal lawsuit against the giant crypto platform.
Furthermore, the report revealed that the prominent decentralized crypto exchange has been going through rigorous internal changes as many top executives departed the firm in recent weeks. Commenting on the officials’ departure, The Wall Street Journey (WSJ) remarked that Binance is under huge threat from the United States regulators. While anticipating enforcement actions from them, and in order to cope with the potential business decline, the firm had decided to cut down on its workforce, resulting in the recent departures.
Crypto Community Worried Over Binance’s Predicament
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Meanwhile, a recent report showed that the giant Binance exchange has witnessed a significant decline in its global crypto market dominance due to the constant challenges it faces with numerous regulators. According to the report, at the beginning of this year, Binance crypto trading volumes significantly dropped from 70% last year to about 50%. It is notable that Binance’s situation may extend beyond itself, and par adventure the firm collapses, the business void it leaves behind would be occupied by other crypto firms. Meanwhile, the short-term aftermath of this could be a decline in its market liquidity, which would deeply impact the price action of tokens.
Following the report, many speculators in the crypto community were worried about the legal issues Binance has entangled itself in. In addition, the report revealed that the legal troubles Binance is facing have urged institutional investors to create contingency plans that will enable them to withdraw their assets swiftly from the exchange before any potential collapse occurs.
In addition, the uproar was further aggravated when rumors had it that the Binance exchange might face criminal charges and some fines in the ongoing investigation by the US Department of Justice as the CEO of the platform, Changpeng Zhao, further intensified the issues. Meanwhile, apart from the DoJ scrutiny, the US Securities and Exchange Commission also filed a lawsuit against Binance and its CEO, claiming they conducted illegal operations and misappropriated customer’s funds.
Zhao Strengthens His Legal Team
The recent regulatory actions have gravely impacted the prowess and dominance of the Binance exchange. In many nations like the Netherlands, the US, and Europe, crypto-related activities, products, or services have been banned. Furthermore, the firm, due to its compliance issues with the US SEC, recorded a significant decline in trading activities, which reportedly led to the departure of Binance.US’ CEO, risk chief, and legal chief.
In addition, the WSJ revealed that Binance’s predicament has profoundly affected the morale of the firm’s workers, adding that in the meeting, the firm’s workers raised their voices concerning how the firm is laying off and treating individuals involved. The internal chaos has attracted questions about the leadership ability of CZ, with some officials reportedly suggesting that the firm would fare better if the CEO left the picture.
Meanwhile, CZ has reportedly strengthened the legal team representing Binance in the DOJ lawsuit to tackle the growing legal charges. Zhao is reportedly working on how to safely surf the complex legal framework in the US while living in the United Arab Emirates, where the US government cannot extradite him as the two countries do not have a mutual extradition treaty.
Both the CEO and the exchange are surrounded by challenging situations, and speculators suggested that the outcome of the DoJ lawsuit would have far-reaching relevance in the cryptocurrency community.