Leading cryptocurrency exchange Binance has agreed to pay one of the largest corporate penalties in U.S. history after a coalition of federal regulators accused the exchange of breaking sanctions and money-transmitting laws.

Binance’s founder Changpeng Zhao is set to pay a $175 million release bond and has agreed to return to the United States two weeks before his sentencing on February 24.

Cathie Wood’s ARK Invest in partnership with digital asset firm 21Shares, has made a significant move in the U.S. spot Bitcoin exchange-traded fund (ETF) market by announcing a management fee for their proposed ETF.

Top stories in the Crypto Roundup today:

• Binance Settles With U.S. Regulators for $4.3 Billion, CZ Steps Down as CEO
• Binance Founder CZ Released on $175 Million Bond
• Ark and 21Shares Set Fee for Proposed Spot Bitcoin ETF
• BNB’s Price Surges on Binance’s $4 Billion Settlement

Binance Settles With U.S. Regulators for $4.3 Billion, CZ Steps Down as CEO

Leading cryptocurrency exchange Binance has agreed to pay one of the largest corporate penalties in U.S. history after a coalition of federal regulators accused the exchange of breaking sanctions and money-transmitting laws.

As part of the settlement, the company will pay $4.3 billion to the U.S. and its founder Changpeng Zhao, also known as CZ, will resign from his role and admit to felony criminal charges of money laundering brought by the U.S. Department of Justice.

The U.S. Department of Justice accused Zhao and Binance of violating the Bank Secrecy Act by not maintaining a strict anti-money laundering system. Before August 2021, the exchange allowed numerous users to trade without adequate Know Your Customer (KYC) checks with Zhao allegedly believing that requiring KYC for every users would lead to a loss of market share.

The lack of these rules also enabled U.S. users to deal with sanctioned users and criminal enterprises, processing over 100,00 transactions related to child sexual abuse, illegal narcotics and terrorism in more than without reporting any suspicious activity, according to Treasury Secretary Janet Yellen.

An independent third-party compliance monitor will oversee Binance for five years and require it to report the transactions it processed that were suspicious. The company’s CEO, Zhao, will be replaced by Richard Teng, who is the Global Head of Regional Markets.

Zhao himself agreed to pay a $50 million fine and is prohibited from “"any present or future involvement in operating or managing” Binance, with that ban ending three years after the monitor is appointed.

Binance Founder CZ Released on $175 Million Bond

Binance’s founder Changpeng Zhao is set to pay a $175 million release bond and has agreed to return to the United States two weeks before his sentencing on February 24.

Zhao has consented to inform the court of his residence and that he could be arrested if he does not show up for his court date. Not showing up in court would also carry a $250,000 fine and up to 10 years in jail.

Zhao also agreed to put $15 million in a separate trust account from his bond and give it up if he does not follow his bond conditions. He also had two guarantors who agreed to pay $250,000 and $100,000 respectively.

U.S. prosecutors are reportedly open to giving Zhao a sentence longer than the 18 months associated with violating the Bank Secrecy Act. The bail order is expected to be reviewed by a judge, and if denied, will become effective on November 27. If a review is granted, Zhao must stay in the U.S.

Binance’s founder has been based in Dubai for years, and no extradition agreement exists between the United Arab Emirates and the United States.

Ark and 21Shares Set Fee for Proposed Spot Bitcoin ETF

Cathie Wood’s ARK Invest, in partnership with digital asset firm 21Shares, has made a significant move in the U.S. spot Bitcoin exchange-traded fund (ETF) market by announcing a management fee for their proposed ETF.

The fee for the Ark 21Shares Bitcoin ETF is set at 80 basis points, as per their latest filing, which translates to a yearly charge of 80 cents for a $100 investment. The ETF, which is intended to trade under the symbol ARKB, initially proposed a fee of 70 basis points.

Bloomberg Intelligence ETF analyst James Seyffart expressed surprise at the fee level, expecting something around 50 basis points. The increase from 70 to 80 basis points in Ark and 21Shares' proposal suggests that the operational costs of such products may be higher than some issuers initially anticipated.

Despite this, the 80 basis point fee is still competitive, especially when compared to the 95 basis point fee of the $1.4 billion ProShares Bitcoin Strategy ETF (BITO), the leading Bitcoin futures ETF. It also significantly undercuts the 2% fee of the $23 billion Grayscale Bitcoin Trust (GBTC).

BNB’s Price Surges on Binance’s $4 Billion Settlement

Following reports of the U.S. aiming for a $4 billion settlement with Binance, the market initially reacted negatively. However, shortly after the news was absorbed, BNB's price surged by 15%

This change in market sentiment reflects how the market has processed the potential resolution of the case, which began in the first quarter of 2023.

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