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Timeline of US coercive actions

by SuperiorInvest

Binance and its founder, Changpeng”CZ” Zhao, admitted violating US money laundering and terrorist financing laws and agreed to pay $4.3 billion in fines.

The Justice Department’s investigation into Binance began years earlier, and in the meantime, other US regulatory agencies launched their own actions against the crypto exchange.

This is what happened.

February 15: Binance was under suspicion since 2018

Reports have emerged that Binance is the target of several US police investigations, some of which date back to 2018.

March 1: Congress involved: Elizabeth Warren leads the charge

Binance came under the scrutiny of the US Congress on March 1 when Senators Elizabeth Warren, Chris Van Hollen and Roger Marshall sent a letter to Binance CEO Changpeng “CZ” Zhao and Binance.US CEO, Brian Shroder, requesting answers to various accusations and the companies’ balance sheets. Senators were not satisfied with the answers and the executives were later accused of lying.

Letter from Senator Warren and company to CZ. Source: Office of Senator Elizabeth Warren

March 27: CFTC strikes with 7 charges

The Commodity Futures Trading Commission (CFTC) filed a complaint against Zhao, chief compliance officer Samuel Lim and Binance, citing seven counts of trading irregularities and market manipulation. The CFTC investigation reportedly began in 2021. Zhao vehemently denied the charges.

May 5: The Department of Justice also has its eyes on Binance

Bloomberg reported that Binance is being investigated by the Department of Justice for violations of sanctions against Russia. Binance maintained a presence in Russia until September.

June 5: SEC strike with 13 charges

The Securities and Exchange Commission filed a lawsuit against Binance, Binance.US and Zhao on June 5 with 13 charges, including sales of unregistered securities, allowing US clients to use the Binance exchange, commingling corporate and client funds and wash sales.

The SEC lawsuit against Binance, Binance.US and CZ. Source: Court listener

The SEC obtained an emergency restraining order against Binance.US and the exchange drastically reduced its activities in the United States.

July 6: Binance leadership exodus begins

Four senior members of the Binance.US team left the company, starting a wave of departures that continued for months.

August 2: Justice Department considers action on Binance

The Department of Justice was reportedly considering filing fraud charges against Binance. To avoid a run on the stock market, the department was leaning toward fines or non-prosecution agreements at the time.

August 14: Binance.US fights to block the SEC

Binance.US filed for a protective order against the SEC, accusing the SEC of launching a “fishing expedition” in its discovery process. Binance insisted that it acted in good faith in the process.

September 13-14: Binance.US Cuts Staff, CEO Resigns, and SEC Responds

Binance.US laid off a third of its workforce – about 100 people and its CEO Brian Shroder also left. The SEC complained to the court about Binance’s lack of cooperation in its discovery process.

September 19: Binance.US achieves minor victory against the SEC

Binance.US scored a minor victory when the court denied the SEC access to the exchange’s software. Instead, the judge suggested that the SEC should be more specific in its discovery requests.

September 21: Binance wants SEC lawsuit dismissed

Zhao, Binance and Binance.US asked the court to dismiss the SEC case against them. They claimed that the SEC misinterpreted the securities law and was imposing its authority retroactively. The SEC responded that Binance had a “tortured interpretation of the law.”

October 23: Binance wants CFTC lawsuit dismissed

Binance filed a motion to dismiss the CFTC lawsuit. If the CFTC were to prevail, it would “allow it to regulate any cryptocurrency activity.” […] related to a derivative product” worldwide, Binance said. “Congress did not make the CFTC the world’s derivatives police, and the Court should reject the agency’s effort to expand its territorial reach beyond what is permitted by law,” the exchange added.

October 26: CZ wealth falls, Congress wants Justice Department to strike

The Bloomberg Billionaires Index dropped Zhao from 11th among the world’s richest people to a more modest 95th. Her personal wealth was said to have dropped from $96.9 billion to $17.3 billion. However, on the November list her position had risen to 68th place.

CZ is ranked 68th on the Bloomberg Billionaires Index for November. Source: Bloomberg

On the same day, Senator Cynthia Lummis and Representative French Hill called on the Department of Justice to take action against Binance and Tether for allowing sanctions evasion. This was two weeks after Binance froze Hamas-linked accounts.

November 21: CZ and Binance indicted

The government filed charges against Binance and Zhao in Washington state on November 14. The documents were revealed on November 21. Zhao steps away from Binance as part of the deal.

November 14 charges against Binance, revealed on November 21. Source: CourtListener

The sanctions amounted to more than $4 billion, including fines imposed personally on Zhao and Lim.

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