DOJ Argues Binance's CZ is a Flight Risk, Should Remain in U.S. Until Trial

Binance Founder Changpeng ‘CZ’ Zhao Isn’t a Flight Risk, His Attorneys Say

The DOJ argued that Zhao could afford to lose the $15 million he put in a trust account and $5 million his guarantors put up. Zhao’s attorneys said this argument ignores the financial commitment he and Binance made. Other DOJ arguments similarly ignore everything Zhao has already done, they said, such as flying to the U.S. to begin with.

“Against the weight of all this information and Judge Tsuchida consideration of it, the government provides no meritorious – or additional – basis to insist that Mr. Zhao remain in the United States away from his family for months between his plea and sentencing,” the filing said.

Zhao’s sentencing is currently scheduled for Feb. 23, 2024. He faces a potential 18-month prison term and agreed to pay a $50 million fine in his plea agreement.

Sam Bankman-Fried’s Life Behind Bars: Crypto Tips and Paying With Fish

Sam Bankman-Fried, convicted of fraud in the meltdown of FTX, has traded in crypto for a new currency: mackerel.

The fallen crypto king, who is cooling his heels at Brooklyn’s Metropolitan Detention Center while he awaits sentencing for seven felony offenses, has learned the fundamentals of prison economics while sharing a dormitory with a former Honduran president awaiting criminal trial and a recently convicted former top cop of Mexico, people familiar with the matter said.

Mackerel has replaced cigarettes as a favored federal jailhouse currency after officials banned smoking, and inmates sometimes use pouches of the preserved fish purchased in a commissary to pay for services from one another. Bankman-Fried traded some pouches of macks, as they are known, to a fellow inmate for a haircut of his signature moptop ahead of his trial, one of the people said.

How the SEC (or Maybe Even the Supreme Court) Could Save Agency Adjudication in SEC v. Jarkesy

On Wednesday, the Supreme Court will hear oral argument in SEC v. Jarkesy, a major constitutional challenge to the future of agency adjudication and enforcement. In an essay forthcoming in the Ohio State Law Journal, David Zaring and I set forth a way for the SEC, Congress, or maybe even the Supreme Court could save agency adjudication. In particular, we argue that, in certain circumstances, the regulated party should have a right to remove an enforcement action from an in-house agency adjudication to an Article III federal court

Delaware Is Trying Hard to Drive Away Corporations

Delaware wasn’t always the go-to state for corporate law. And if it escalates its flirtation with environmental, social and governance investment principles, the First State might end up losing its privileged status, just like its neighbor once did.

New Jersey became “the mother of trusts” in the late 19th century by pioneering incorporation laws that gave companies unprecedented freedom. But the Garden State lost that title in 1913 when Gov. Woodrow Wilson set out to correct perceived abuses by making executives liable for corporate “irresponsibility.” Companies responded by fleeing the state.

Wilson’s successor repealed his changes, but the damage was done. As Ralph Nader and co-authors later put it: “Any state that could elect Woodrow Wilson as Governor could never be fully trusted by big business again.”

History stands to repeat itself in Delaware. New Jersey fell prey to Wilson’s trust-busting progressivism. Today, Delaware is falling in line with other blue states in embracing ESG, which rejects shareholder value as corporate law’s lodestar. Meanwhile, red states are developing potentially attractive alternatives.

Binance Penalties Include a Number of Crypto Industry Firsts

U.S. regulators’ settlement with the largest cryptocurrency exchange marked a new era in its enforcement efforts in the nascent sector.

Some of the penalties imposed on Binance are a first for a cryptocurrency company, with regulators employing powerful measures typically used in the past to rein in major financial institutions.

Binance’s penalties include record-breaking civil fines for the Treasury Department, the first monitorship imposed by the Treasury’s Financial Crimes Enforcement Network and the first personal liability charge against a chief compliance officer by the Commodity Futures Trading Commission.

Coinbase CEO: crypto industry can turn page after Binance settlement

The crypto industry can finally close the chapter on a litany of scandals and problems after Binance was hit with a historic settlement by the U.S. Department of Justice, Coinbase CEO Brian Armstrong said Monday.

“The enforcement action against Binance, that’s allowing us to kind of turn the page on that and hopefully close that chapter of history,” Armstrong said in an interview with CNBC’s Joumanna Bercetche.

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Armstrong pushed back on the suggestion that crypto is mainly used for nefarious purposes such as fraud, money laundering, and terrorist financing, a common refrain from financial firms that have avoided jumping into the space due to compliance concerns.

“It’s true that there have been some small amount of illicit activity in crypto but it’s actually less than 1% from what we’ve seen. If you look at illicit uses of cash it’s oftentimes more than that,” Armstrong told CNBC.

Why The Binance DOJ/FinCEN/CFTC Actions Are a Huge SEC Victory (Even Though the SEC Was AWOL From The Plea Party)

Gary Gensler and Gurbir Grewal, where were you yesterday? We missed your smiling faces . . .

Conspicuously absent from yesterday’s blockbuster press conference announcing the Binance-related settlements, pleas and consent orders with the U.S. Department of Justice, the U.S. Commodity Futures Trading Commission, the U.S. Department of Treasury and the U.S. Financial Crimes Enforcement Network was the U.S. Securities and Exchange Commission. Glaringly missing from the DOJ podium yesterday was SEC Chair Gary Gensler and SEC Director of Enforcement Gurbir Grewal.

The SEC appears to be the sole U.S. federal government holdout for a Binance-related settlement.

But that does not mean that the SEC staff were not smiling gleefully in a conference room somewhere on the tenth floor at SEC headquarters, watching the press conference and celebrating the Binance news. Indeed, for a laundry list of reasons, the SEC netted a tremendous victory yesterday and is likely ecstatic about it all.

Ramaswamy’s Crypto Deregulation Plan Is Scaring the Industry

Ramaswamy — who is polling in the single digits — is unlikely to become the 2024 Republican presidential nominee, but he has echoed many policy positions of frontrunner Donald Trump, teeing himself up for a potential high-profile spot in a GOP administration that could have significant sway over crypto.

Ramaswamy’s proposal would eliminate many of the few crypto regulations in effect and cut the SEC and other regulatory agencies’ workforces by 75%. That has raised alarms in the industry, particularly given its proximity to the criminal conviction of Sam Bankman-Fried following the implosion of his trading platform FTX and guilty pleas announced Tuesday from crypto exchange Binance Holdings Ltd. and its founder, Changpeng Zhao, on anti-money laundering and US sanctions violations charges.