What’s next for CZ?🔮
Binance’s Changpeng Zhao faces a decade in prison? JPMorgan views Binance's settlement positively. Justin Sun pledges an "epic airdrop." ECB President's son kinda liked crypto. And who likes AI?
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Changpeng Zhao (CZ), the former CEO of Binance, might be looking at spending a whole decade in the slammer.
CZ was copped with major trouble because of Binance's involvement in what the DOJ describes as a colossal global criminal operation.
To make amends, Binance agreed to cough up $4.3 billion and adhere to some strict compliance measures.
Read this: A $4 billion trouble 💸
And this: Binance Bites the Bullet 🙊
What's next for CZ?
CZ's sentencing is scheduled for February 2024, but the road ahead is rocky. While his defense expects a brief sentence and is challenging travel restrictions, the DOJ hints at a potential sentence of up to 18 months, with CZ facing a statutory maximum of ten years.
Legal experts suggest CZ may receive a 12–18-month sentence at a minimum-security prison, with potential home detention and probation.
"As the defense will certainly emphasize at sentencing, Mr. Zhao has a family and has never spent a day in custody. The penalties he faces at sentencing will no doubt seem significant to him, and that weighs in favor of the reasonable restrictions the United States proposes.”
The former Securities and Exchange Commission official John Reed Stark says.
The outcome could depend on his relevance to the crypto industry and the DOJ's ability to deter future money laundering in the crypto space.
Seeking a longer jail term for CZ won't be straightforward.
The DOJ would need substantial evidence of criminal activity beyond the agreed settlement.
Controversy surrounds this case, as it differs significantly from how traditional finance is handled.
CZ was released on a $175 million bond, with Judge Richard A. Jones set to review the government's motion regarding bail conditions on November 27.
Changes could be in the cards.
Where does he stay?
CZ's sentencing hearing is set for February 23, 2024. Judge Richard A. Jones's decision on pre-sentencing travel will be crucial.
Recently, the DOJ highlighted his potential flight risk due to UAE citizenship and considerable wealth, advocating for stringent pre-sentencing restrictions, including staying in the US.
CZ's attorneys argued that keeping him in the US before sentencing would pose hardships for him and his family.
His wife and children cannot relocate to the US during the several-month period between the hearing and February's sentencing.
CZ was allowed to reside in the UAE until two weeks before sentencing, a decision met with controversy.
Magistrate Judge Brian Tsuchida emphasized CZ's intent to resolve the case and deemed him a low flight risk.
“Based on all the relevant facts, including Mr. Zhao’s voluntary self-surrender, his intent to resolve this case, and the sizable bail package he proposed, Judge Tsuchida found that Mr. Zhao presents no risk of flight, even while residing in the UAE,” the filing reads.
The defense argued that there's no incentive for CZ to flee, as he could be eligible for a non-jail sentence, potentially up to 18 months, in a non-prison setting like home detention or community confinement.
Returning to the UAE after a brief or possible non-prison term would allow him to reunite with his family.
CZ's high profile and recognition make it impossible for him to evade the U.S. justice system, according to his defense.
They stressed that he voluntarily returned to the US to plead guilty and has no intention of evading justice.
TTD Blockquote 🔊
Analysts, JP Morgan.
Binance’s settlement with US agencies as ‘positive’ for crypto.
JPMorgan expressed a positive outlook on Binance's settlement with US authorities.
"We see the prospect of settlement as positive as uncertainty around Binance itself would subside and its trading and BNB Smart Chain business would benefit."
"For crypto investors the prospect of settlement would see the elimination of a potential systemic risk emanating from a hypothetical Binance collapse."
Regulation is Welcomed: JPMorgan notes that the settlement aligns with the ongoing trend of shifting toward regulated crypto entities and instruments.
This shift is viewed positively, as increased regulation is expected to attract traditional finance investors to the crypto space.
The involvement of major asset managers like BlackRock and Fidelity in the approval of spot Bitcoin ETFs by the SEC further supports this trend.
JPMorgan suggests that Binance's market share, which had been declining due to uncertainty, may stabilise and even partly reverse as the implications of the settlement on its operations become clearer.
TTD Numbers 🔢
$238 million
Following recent security breaches on exchanges Poloniex and HTX, crypto mogul Justin Sun has pledged to provide an "epic airdrop" to affected users.
Attackers exploited vulnerabilities on both exchanges, resulting in the loss of assets worth at least $238 million.
Justin Sun expressed his apologies to users affected by the hacks and assured them that all assets would be covered.
The airdrop is intended to compensate users for their losses and provide support during the recovery process.
While airdrops are common in decentralised finance (DeFi) projects, they are rare for centralised exchanges like Poloniex and HTX.
The attacks on Poloniex and HTX have raised concerns about the security of centralised exchanges and their ability to protect user funds.
Both exchanges froze deposits and withdrawals following the incidents and are working on enhancing their security measures.
HTX also announced that deposit and withdrawal functionality is now available for multiple currencies, including Bitcoin, Ether, Tron, and Tether.
The exchange plans to gradually bring back functionality for the remaining cryptocurrencies by next week.
TTD AI📍
Hong Kong's Hospitals Harness AI
Hong Kong's Hospital Authority plans to use AI to combat the rise of superbugs and antibiotic overprescription.
Due to the redistribution of resources during the COVID-19 pandemic, there has been an increase in multidrug-resistant organisms on the island.
The prevalence of vancomycin-resistant enterococci and Candida auris has risen, leading to antibiotic resistance.
In January 2024, the Hospital Authority will launch an AI pilot at two hospitals to analyze clinical data and determine the necessity of prescribing antibiotics.
The AI will initially focus on one type of antibiotic and then expand to others in 17 public hospitals.
California Dreams of GenAI Training for All
California Governor Gavin Newsom is calling for statewide generative artificial intelligence (GenAI) training to ensure residents have the skills needed to thrive in the emerging technology.
The report highlights the significant employment impact of GenAI, with Goldman Sachs forecasting it to affect 300 million jobs worldwide.
The state government aims to provide training for its workforce to use state-approved GenAI and achieve equitable outcomes.
A recent report from the Organisation for Economic Co-operation and Development (OECD) identifies high-skill, white-collar jobs as the most at risk from AI, particularly those involving non-routine cognitive tasks:
Nigeria's High-Tech Payments System Gets an AI Upgrade
The director-general of Nigeria's National Information Technology Development Agency (NITDA), Kashifu Inuwa Abdullahi, has emphasized the importance of collaboration between NITDA, the Central Bank of Nigeria (CBN), and financial institutions to integrate artificial intelligence (AI) and data analytics into the country's payments system.
Inuwa believes that fintech can drive Nigeria's performance in the industry and environmental, social, and governance sectors.
TTD WTF 🙄
Mama Knows Best, but...
Christine Lagarde, the President of the European Central Bank (ECB) and a vocal critic of crypto, has a son who learned the hard way not to ignore his mother's advice.
Despite Lagarde's attempts to convince her son to stay away from crypto, he "ignored [her] royally" and ended up losing almost all of his crypto investments, she admitted during a town hall meeting in Frankfurt.
Costly Lesson: Lagarde's son, in his 30s, reportedly invested in cryptocurrencies against his mother's wishes and "lost almost all the money that he had invested."
Lagarde had spoken publicly about her son's crypto holdings last year and had tried unsuccessfully to dissuade him from investing in digital assets.
It was only after sustaining significant losses, losing about 60% of his investment, that Lagarde's son finally conceded that his mother was right.
She humorously recounted that her son "reluctantly accepted that [she] was right" after the losses.
Lagarde has previously stated that all crypto assets are "worth nothing" and "based on nothing."
She has also dismissed the idea of central banks holding Bitcoin or other crypto.
While skeptical of cryptocurrencies, Lagarde has been a supporter of central bank digital currencies (CBDCs).
TTD Surfer 🏄
The SEC is having difficulty serving Hex founder Richard Heart with its lawsuit.
Zipmex Thailand, a beleaguered crypto exchange, has announced that it is halting trading in compliance with regulations set by Thailand's SEC.
Circle, the issuer of the USDC stablecoin, has partnered with SBI Holdings to expand its presence in Japan.
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