I. Spotlight on Regulation: The Policy Landscape Behind the Binance Incident
1.1 The Hidden Worries Under Heavy Penalties 1.2 The Cage of Regulation, The Mirror of Regulation
II. On-Chain Censorship: The Battleground of Technology and Politics
2.1 The Core Zone of Regulation and Anti-Censorship 2.2 Trustworthy is Censorable 2.3 Overview of Ethereum On-Chain Censorship
III. Censorship Beyond Ethereum: The Ubiquitous Sword of Damocles
IV. Cryptographic Anarchy: The Third World of Tomorrow
4.1 Ethereum, "Out of the United States" 4.2 Ethereum: Why Asia, Africa, and Latin America are Needed 4.3 Asia, Africa, and Latin America: Why Ethereum is Needed
V. The Black Eye of Crypto: Dawn Breaks in the East
In 2023, the fate of Binance and its founder, Changpeng "CZ" Zhao, seemed to have entered an unavoidable vortex. The investigation that started in 2018 finally reached a significant turning point in 2023.
At the beginning of the year, the scrutiny of the US Congress turned to the world's largest cryptocurrency exchange. The questioning by senators such as Elizabeth Ann Warren not only focused on Binance's financial transparency but also involved a series of deeper compliance issues. In March, the U.S. Commodity Futures Trading Commission (CFTC) filed a major lawsuit against Zhao Changpeng and Binance. Shortly thereafter, the U.S. Securities and Exchange Commission (SEC) followed suit, filing a lawsuit against Binance with 13 heavy charges. The reasons for the CFTC and SEC's lawsuits against Binance include:
The CFTC accused Binance of violating the Commodity Exchange Act and CFTC regulations, illegally offering and executing commodity derivative transactions to Americans, and failing to follow basic compliance procedures to prevent terrorist financing and money laundering activities.
The SEC accused Binance of allegedly operating a fraudulent network, conflicts of interest, lack of transparency, and evasion of legal actions.
As the investigation deepened, senior team members of Binance.US began to resign, seemingly heralding a bigger storm brewing. By summer, Binance's license application in the Netherlands failed, and France also began to investigate it. Entering the fall, the situation became increasingly severe. Binance was forced to stop accepting new UK customers, and its global influence and business scope were restricted. The Financial Crimes Enforcement Network (FinCEN), a department of the U.S. Department of the Treasury responsible for regulating financial transactions to prevent and combat financial crimes, including money laundering and terrorist financing, cooperated with the U.S. Department of Justice (DOJ) to investigate and regulate Binance.