CRYPTO Collapse & Crackdown as Binance CEO is Jailed & Fined $4.3 Billion for Money Laundering

CRYPTO Collapse & Crackdown as Binance CEO is Jailed & Fined $4.3 Billion for Money Laundering

hi welcome back to Joe blogs in today’s episode I want to talk to you about the exciting world of cryptocurrency now crypto is something that I like to keep an eye on but I haven’t actually posted a video on it since November 23 when everybody’s favorite founder of a cryptocurrency exchange Sam bankman freed was found guilty of Fraud and told that he was going to be spending a long time behind bars now his sentence has now been released and he was given 25 years which is actually significantly less than the 115 years that he was potentially facing the world’s largest cryptocurrency exchange is binance and binance was founded by a Canadian national called CZ and in the absence of Sam bankman freed he became the pinup boy for the world of crypto but unfortunately in November 23 around the same time that Sam bankman freed was found guilty he had to resign his position as chief executive of Finance due to the fact that he was facing significant moneya laundering charges in the USA and unfortunately for CZ he’s now been found guilty the former chief executive of the world’s largest cryptocurrency exchange binance was sentenced on Tuesday to 4 months in prison after pleading guilty to violating us anti-money laundering laws Chang Pang jaao known as CZ was once considered the most powerful figure in the industry he’s now the second major crypto boss to be sent to prison after ftxs Sam bankman freed who’s appealing his own 25-year prison term in a Seattle courtroom Jiao told the federal judge before his sentencing that he was sorry and that quote I failed to implement an adequate anti-money laundering program I realize now the seriousness of that mistake prosecutors had argued jiao’s conduct was not a mistake they accused binance of employing a wild west model that welcomed criminals and did not report more than a 100,000 suspicious transactions with designated terrorist groups including Hamas Al-Qaeda and Islamic State they also said it supported the sale of child sexual abuse materials and received a large portion of ransomware proceeds the judge faltered the 47-year-old for making binance’s profitability a higher priority than complying with us laws so the founder and former chief executive of binance has been found guilty of money laundering and been given a prison sentence of 4 months which he probably won’t serve the full term of he’ll probably get let out early for good behavior it might get an electronic tag or something like that and I wanted to look into what the potential punishment for moneya laundering is in the USA because 4 months doesn’t seem very long for the biggest cryptocurrency Exchange in the world binance is by far the world’s largest crypto exchange and processes around 12.5 billion dollar worth of crypto transactions every single day and when you consider that the company takes around 0.6% as its fee on all of those transactions it’s generating around $75 million per day in fees so that equates to total annual revenue of around $27 billion now the details of the binance finances are highly secretive it’s a very secretive company you can’t find out any data on it at all and it hasn’t really done any fundraising historically certainly nothing that’s in the public domain but as the founder and former chief executive of the business CZ is likely to hold the vast majority of those shares and at the last count he was estimated to have personal wealth of around $43 billion so this is a serious business processing serious amounts of capital so let’s have a look at what the potential punishments are for moneya laundering in the USA now the penalties for moneya laundering in the USA vary depending on what state you’re in and as CZ was charged in a court in Seattle the rules fall under Washington State and in Washington state the maximum penalties for money laundering are 10 years in prison fines of up to $5 million or twice the value of laundered money whichever total is greater compensation for individuals impacted by the money laundering crime and possible forfeiture of personal property and assets utilized or intended to use in the money laundering so the maximum penalties in Washington state are a 10-year prison sentence or a fine of up to $5 million or double the amount that you’ve been laundering so let’s have a look at what the financial penalties were applied against CZ binance has also agreed to a $ 4.32 billion penalty while ja paying a $50 million criminal fine plus $50 million to the US commod Futures Trading commission J stepped down as head of binance last November when he and the exchange he founded in 2017 admitted to evading money laundering requirements under the bank secrecy act okay so CZ has been hit with $250 million fin so a total of $100 million that he has to pay and that’s obviously significantly more than the maximum penalty of5 million under Washington state law so what that means is that they’re applying the two time multiple against the money that’s been laundered so that would indicate that he’s laundered $50 million if he’s having to pay $100 million but actually binance the company is having to pay a penalty of 4.3 billion so that would indicate if you’re applying that two times multiple that binance has been laundering over $2 billion now taking a step back and looking at those numbers they are absolutely huge 50 million is a massive number a100 million fine would be huge for most people however as we discussed earlier in the video CZ is estimated to be worth around $43 billion so a $100 million fine isn’t really going to concern him too much I’m sure that’s less than one day’s interest on all of the cash that he’s got sitting snaffled away in Banks all around the world what the $100 million fine tells us is that this is a significant amount of money laundering and when you take into count the $4.3 billion fine that binance itself has agreed to pay this is one of the biggest money laundering events that we’ve seen anywhere around the globe so when you consider the 10-year maximum jail sentence that’s applicable for money laundering and the fact that CZ has only been given a four-month sentence that doesn’t really stack up this fine is one of the biggest that’s ever been applied in Washington state for money laundering however he’s been given a relatively poultry sentence when you compare it to what Sam bankman freed has recently been given a 25-year sentence it doesn’t really stack up so I think what we’re seeing here is a financial penalty being applied against both binance and CZ but not the imprisonment penalty and it’s really interesting I think when you look at that and consider why the courts have agreed to do that a 4 billion P fine and a four-month jail sentence doesn’t seem like the right package from where I’m sitting now I don’t know whether or not there has been any money laundering going on here obviously he’s been found guilty so the courts believed that there was enough evidence to convict him what we saw earlier in today’s video is that he was accused of taking money from criminals and terrorist organizations and obviously that is something that is highly criminal so even though he wasn’t involved in any of those activities directly by facilitating those businesses allowing them to put money into the financial system and to basically be able to use that money for other purposes is obviously a massive criminal offense so a four-month prison sentence really doesn’t seem appropriate and especially when you take into account that a guy in Turkey who is the founder of a cryptocurrency business was recently given over 11,000 years in prison in 2017 a Turkish National called faruko fatia oza founded a cryptocurrency exchange called coinex and at that point it was the fourth largest Exchange in Turkey however oza had big plans for the exchange and in 2020 he went Global and changed the name to THX and at its height in around November 2020 it was estimated that the company was dealing with more than $3 billion worth of transactions in crypto every single day so this was a significant player now one of the features of THC was that it offered its users some free crypto in April 2021 it had a promotion on Dogecoin which was the cryptocurrency that was reportedly started as a joke by an employee of IBM and an employee of adobe and was famously promoted by big hitting heavyweights such as Elon Musk and financial gurus Jean Simmons from kiss and Snoop Dog in April 2021 THX promised to give away 4 million dogecoins to it users on what was being called Doge day which was the 20th of April 2021 however on that day there appeared to be problems with the system because users couldn’t access any of their free dogecoins despite the fact that the coin had risen in value by 20% on that day as a result of the promotion that was being put forward by THX and the next day the exchange was closed down and the founder fled to Albania on the 30th of August 202 to faruko fatia oza was arrested in Albania and brought back to Turkey and in September 2023 he was sentenced to a total of 11,196 years in prison which is a quite exact number isn’t it if you’re going to give somebody more than a thousand years in prison surely you would keep it to round Figures it’s easier to give somebody 10,000 years than 11,196 it seems a very specific number to me when you consider this is a guy who’s around 30 years old so I think a 100 years would have been more than sufficient to give him in prison a th000 years maybe if you want to make an example of him 10,000 years if you want to get some publicity but 11,196 does seem like a very unusual number but that’s the number he was given and he to my knowledge is the person with the biggest prison sentence in the world so 4 months for CZ in the USA seems like an absolute steel so what’s the summary and conclusion today well I wanted to make this video because I think it’s really interesting that the two highest profile Founders and former Chief Executives of the biggest cryptocurrency Exchange in the world have both been jailed in the USA and cryptocurrency famously has been very difficult to regulate up until now the USA is really leading the world in terms of trying to regulate the world of crypto trying to to bring these exchanges under control and get some sort of rules and regulations and to be able to investigate them and what we’ve seen is that binance which up until now had looked to evade all of those regulations because it’s registered in 14 different locations globally it doesn’t have a head office and it doesn’t publish any official reports especially not in the USA however because it has some trading in the USA the US was able to go after binance and obviously CZ must have been given legal advice and told that it was better for him to take the wrap and go for a short prison sentence than trying to evade the US and ultimately being brought down in the same way as Sam bankman freed and what we’ve talked about in today’s video is that binance has been found guilty of these money laundering offenses and the offenses that they’ve specifically been charged with is helping terrorist organizations and criminal organizations to be able to launder their money and we are talking about an institution that’s dealing with more than 122 billion worth of transactions every single day so this is absolutely huge and obviously from a money laundering perspective this is one of the biggest cases that has come to court and been found guilty in recent years and the fine that was applied against binance of $4.3 billion is absolutely huge that’s bigger than the turnover of most companies and binance have happily accepted that as well as the 4-month prison sentence they’re happy to pay that and move on and that doesn’t seem right to me when you’ve got money laundering of that scale surely we’ve got a business that’s inherently involved in criminal activities here it’s proven it’s been proven in court and it doesn’t seem right that it’s carrying on trading and it’s left to its own devices to carry on trading more than 122 billion of transactions every single day and when me take a step back and look at the fact that the two biggest highest profile people in the world of cryptocurrency have now been jailed that tells us that there are still major problems with cryptocurrency and crypto exchanges there is still a lot of Dirty Money entering the world of crypto and clearly the investigators have found evidence of that and they need to keep looking there needs to be more regulation in the world of crypto because this can’t continue if criminal and terrorist organizations are able to legitimize their funds by putting it into crypto and then taking it back out at some point in the future then obviously that’s defeating the whole purpose of having money laundering regulations in place the world of banking is much more difficult to get past these days and so the criminal world and activities have moved to crypto and I think it really highlights the fact that regulation needs to be brought in not just in the USA But globally to try to get control of what’s going on so the overall summary of today’s video is that the two highest profile people in the world of cryptocurrency are now currently behind bars in the USA as a result of slightly different criminal offenses one’s been done for fraud one’s been done for money laundering But ultimately this tells us that the world of crypto still has major problems and more regulation is needed so hopefully you’ve enjoyed today’s video you found it useful informative and thought-provoking if you’ve liked what I’ve said then please give me a thumbs up thank you for watching this video all the way through to the end and here’s something to put a smile on your face

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Binance is the largest Crypto Business in the world and processes more than $12 Billion in Crypto transactions every day. The fees earned by Binance have made its founder very wealthy however he was forced to resign from the business in November after being charged with MONEY LAUNDERING. He has now been found GUILTY and jailed in the USA. Binance has also been fined $4.3 BILLION. In this video I provide more details on the money laundering case, discuss the jail sentence compared to a recent case in Turkey and the implications for the Crypto industry.

For specific details please check out the CHAPTER list below.

Thanks for watching and please LIKE and SUBSCRIBE.

Chapters:
0:00 Intro
2:24 MONEY LAUNDERING
4:32 FINANCIAL PENALTIES
8:22 11,196 YEARS
11:00 SUMMARY & CONCLUSION

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