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How the Crypto Industry Responded to FinCEN’s Proposed Mixer Rule

Last October, the Financial Crimes Enforcement Network proposed implementing a new regulatory regime for crypto mixing services that would treat the entire class of privacy tools as money laundering threats and force new recordkeeping rules on U.S. people or entities that use them. The industry had a chance to weigh in. Here’s the gist of their responses.

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Binance CEO Disputes JPMorgan Chief’s Critique Of Crypto

Richard Teng, the Chief Executive Officer (CEO) of the world’s largest crypto exchange Binance challenged JPMorgan Chase’s CEO Jamie Dimon’s stance on cryptocurrencies.

Binance CEO Disagrees With Jamie Dimon

The Binance CEO recently defended cryptocurrencies by opposing the anti-crypto narrative promoted by the JPMorgan CEO in a hearing held on Wednesday. Teng took to X (formerly Twitter) to share his displeasure with Dimon’s narrative against crypto.

The JPMorgan CEO’s critics were set on the legitimacy and regulation of cryptocurrencies. According to Dimon, he has “never supported cryptocurrencies” and believes the “only real use case for crypto is criminals.”  He further added that he would close down crypto if he had the power to do so. The CEO stated:

I’ve always been deeply opposed to crypto, the only true use case for it is criminals. If I were the government I’d close it down. 

Teng underscored the need to compare the scope of illegal activity in cryptocurrency to that of traditional fiat money. He further highlighted the data compiled by Dr. Andrzei Gwizdalki from sources like the UN and the World Economic Forum.

The data shows that illegal activities connected to fiat currencies are over 100 times bigger than crypto. According to the data, cryptocurrencies are linked to an estimated $20 billion in illegal activities. 

Meanwhile, fiat currencies such as the United States dollar are implicated in approximately $3.2 trillion in illegal activities yearly. However, due to the secret nature of money laundering, it is difficult to determine the total amount that has been lost. 

So far, Dr. Andrzei Gwizdalki believes the corruption and money laundering in connection with fiat “casts a dark shadow.” He also added that this is a reputation that the crypto space should not mirror.

Furthermore, Gwizdalki has urged policymakers to be well-informed and handle real issues within their traditional systems. He believes using crypto for illegal reasons is “stupid and dangerous” since every transaction is transparently recorded.

The Crypto Firm Faces Potential Collapse

Former United States Securities and Exchange Commission (SEC) official John Reed Stark has highlighted a potential collapse for Binance. Stark’s belief is due to the Binance plea agreement by the former CEO of the crypto exchange Changpeng CZ Zhao. Stark stated:

The Binance Plea Agreement is Already Blowing Up. More Evidence of the Possibility of a Binance Collapse (And a 10-Year Sentence for CZ).

He also highlighted Teng’s failure to provide answers to simple questions during an interview as another potential reason. In the interview, journalist Scott Chipolina asked Teng where Binance is headquartered, but the CEO refused to provide specific answers.

So far, Stark has voiced doubts about the exchange’s capacity to comply with the stringent DOJ/FinCEN monitoring and cooperation requirements. He believes that while investigations are still ongoing, the government will bring more accusations against Binance and Changpeng Zhao.

Binance

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Binance’s Busy Day, Kraken’s Second SEC Fight

Binance is paying one of the largest fines in corporate history to the U.S. Department of Justice, while its founder and CEO, Changpeng “CZ” Zhao, stepped down from his role running the platform as part of a settlement with multiple federal agencies. Meanwhile, Kraken is facing a lawsuit from the U.S. Securities and Exchange Commission that echoes the SEC’s previous wave of suits.