- According to JPMorgan, the agreement reached by crypto exchange Binance with U.S. prosecutors on Tuesday is a positive development for the company and the crypto sector.
- The agreement, which includes the Department of Justice, the Treasury Department, and the Commodity Futures Trading Commission, concludes a years-long investigation into the exchange.
- With the news of the agreement, Binance experienced an exit of over $1 billion in the last 24 hours, while some competitor exchanges saw inflows.
JPMorgan analysts share their views on the crisis at the crypto exchange Binance: What does this event mean for the industry?
JPMorgan Analysts Release Binance Report
According to JPMorgan, the agreement reached by crypto exchange Binance with U.S. prosecutors on Tuesday is a positive development for the company and the crypto sector. The team led by JPMorgan’s chief analyst Nikolaos Panigirtzoglou stated, “We view the probability of an agreement as a positive development because uncertainty around Binance will decrease, and trading and the BNB Smart Chain business will benefit from it,” and added:
“For crypto investors, the probability of an agreement will eliminate the potential systemic risk arising from a hypothetical Binance collapse.”
On Tuesday, Binance and its co-founder Changpeng “CZ” Zhao reached a comprehensive agreement with U.S. authorities, admitting guilt to serious money fines and violations of U.S. sanctions. Binance agreed to pay $4.3 billion, making it one of the largest corporate settlements in U.S. history.
Under the terms of the agreement, Zhao will pay a $50 million fine, conditioned on his resignation as CEO. The agreement, which includes the Department of Justice, the Treasury Department, and the Commodity Futures Trading Commission, concludes a years-long investigation into the exchange.
After admitting guilt, Zhao was released on $175 million personal recognizance with up to 18 months of expected prison sentence, with his sentence scheduled for February 23, 2024.
“Binance will continue its journey”
In a letter sent internally after resigning from the CEO position, Zhao wrote, “Binance will continue its journey,” and continued, “I will have to deal with some pains, but I will stand firm. We will get through this, but with some structural changes. It might not be a bad thing when we look back a few years from now.”
Richard Teng was appointed as CEO in place of Zhao. Teng, who previously served as a regulatory official, stated that his priorities are to ensure that Binance users can trust in the “company’s financial strength, security, and integrity.” He expressed confidence that the company would emerge as a “stronger company” in the process of “laying the foundation for the next 50 years.”
Along with the news of the agreement, Binance experienced an exit of over $1 billion in the last 24 hours, while some competitor exchanges saw inflows, according to DefiLlama data. Binance’s native token, BNB, also dropped nearly 10% in the last 24 hours.
