YEREVAN (CoinChapter.com) — The situation surrounding Binance, one of the world’s largest cryptocurrency exchanges, and its founder, Changpeng Zhao (CZ), is becoming increasingly precarious. Following the plea agreement with US regulatory bodies, some expect the company to transfer itself into a compliant, transparent entity. However, experts have already raised doubts about the possibility of such a transformation under Binance’s new CEO Richard Teng.
Moreover, the prospects of the exchange shutting down completely are becoming more real than ever. There is also the chance that CZ could serve up to 10 years in prison.
Former SEC Official not impressed with Binance leadership
In a post on social media platform X, former SEC official John Reed Stark questioned the leadership skills of Richard Teng, who took over as the CEO of Binance after CZ’s resignation.
Citing a recent interview with Financial Times journalist Scott Chipolina, Stark hinted that the exchange may still be digging a big pit for itself.
The former SEC official believes Teng did not give any direct answers to basic questions. Some of these questions sought details about the firm. These included the location of the Binance headquarters and the number of its employees. Moreover, Chipolina inquired about the prospects of the firm undergoing an audit anytime soon.
Considering that the new Binance CEO could not hold up against questions coming from a journalist, Stark wonders what he will do when regulators question him. Once the US Department of Justice (DOJ), the Financial Crimes Enforcement Network (FinCEN), and the Commodity Futures Trading Commission (CFTC) get on the case, the inquiry will be tougher.
“Given Binance’s alleged wrongdoing, the DOJ/FinCEN cooperation agreements and monitorships are extraordinarily comprehensive, robust and formidable. Yet Binance remains a red-flag potpourri, currently even unwilling to divulge the location of its headquarters or to submit to a traditional audit of any kind. It’s mind boggling,”
he writes.
Moreover, he believes Teng’s interview starkly contrasts with that of Noah Perlman, Binance’s Chief Compliance Officer.
In an interview with Law360, Perlman welcomed the monitorships from the DOJ and the FinCEN as a “business accelerator”. He contended that Binance is currently undergoing a significant cultural shift towards compliance.
However, Teng’s reluctance to be transparent casts doubt on this optimistic outlook. Stark suggests that there may be an internal conflict among the Binance leadership and a lack of coherent strategy toward regulatory compliance.
Binance collapse a matter of time?
Analyzing the ongoing situation at the crypto exchange, Stark believes that the eventual collapse of Binance is inevitable. He is convinced that the company will fail to meet the conditions set by the regulatory bodies.
As a result, Richard Teng and his team will see fresh charges filed against the firm. Meanwhile, the ongoing investigation against Changpeng Zhao will cause more complications.
Noah Perlman’s optimism, according to the former SEC official, is also misplaced.
“A Binance collapse is inevitable – and, despite his assertions to the contrary, Perlman is not viewing the Binance criminal enterprise through rose-colored glasses – he is viewing it with blinders on,”
he said.
However, Stark is not the only one who sees dark days ahead for Binance. Billionaire investor Calvin Ayre also believes there is more to come for the crypto exchange.
“You just know the DoJ never closed their Binance file and now have an investigation into Teng’s rule there. There is no way Binance has stopped doing crimes yet and each crime after that settlement is a new world and one showing serial criminal activity, so less benefit of any doubts,”
he wrote.
In light of these, it is evident that the future of Binance remains uncertain. Amid the mounting scrutiny and regulatory pressure on the exchange, the after-effects could be disastrous for the cryptocurrency industry as a whole.
