No Comments
After over a year of developments, Sam Bankman-Fried is finished, doomed to spend the next 25 years behind bars, but 2024 still has a number of high-stakes crypto legal dramas at play, in this article uncover why the SEC, KuCoin, and Binance could all be important cases to watch in the year ahead.
It can be fun to dip into the crypto degen pool. There are many dangers, scams, and rugs, but it’s fun and can really, really pay off.
Occasionally, the people behind these crypto scams get justice, and the FTX case has proven that law enforcement efforts to pursue justice against perpetrators of crypto crime are increasing.
One thing that hasn’t changed is the delicate interplay between high-stakes crypto legal dramas and price action, and FTX co-founder Sam Bankman-Fried’s sentencing is just the tip of the iceberg.
With Binance’s legendary former CEO Changpeng “CZ” Zhao waiting for his trial, Do Kwon skipping jail in Montenegro, and several of what we thought to be “blue chip” projects going under, there’s a lot of crypto legal drama in 2024.
Here are the next biggest court cases in cryptocurrency.
Key Crypto Legal Drama #1 – Changpeng Zhao’s Countdown To CZ Trial
The co-founder of Binance, CZ, is facing up to 18 months in jail, and whispers of a maximum 10-year sentence.
The short version is that Binance failed to report over 100,000 suspicious transactions to names you might recognize, such as ISIS, Hamas, and Al-Qaeda. Laundering money for U.S.-designated terrorist groups is illegal.
After a guilty plea to money laundering charges, all eyes are on his April 30 sentencing in Seattle – with many expecting a harsh sentencing to dent BNB price.
Appreciate the support. But will try to stay off twitter for a while. 🙏 https://t.co/ApqEOzXHIa
— CZ 🔶 BNB (@cz_binance) December 9, 2023
But, at the world’s largest exchange, it’s not just CZ feeling the heat; Binance and its U.S. counterpart settled for $4.3 billion over charges, including operating without a license.
And, that’s without considering that the SEC is still Chasing Binance US with allegations of selling unregistered securities.
Crypto Legal Drama #2 – Aftermath and Fallout of the FTX Trial
Caroline Ellison testified that Sam’s philosophy on life is to always gamble on the chance of things getting better, no matter how small the odds are. he would flip a coin that had 50-50 odds of destroying the whole world if the other side was making it better
— mimi✨ (@mimihl0) March 30, 2024
The aftermath of FTX’s collapse sees its execs facing daunting prison sentences. Caroline Ellison, who led FTX’s affiliate hedge fund, Alameda Research, will get prison time despite being the key witness in Sam Bankman-Fried’s trial.
Caroline had a cult of personality at FTX that goes deep. Alongisde Ellison, FTX’s Zixiao “Gary” Wang, Nishad Singh, and Caroline Ellison could all also be facing decades behind bars for their roles in the exchange’s fraud debacle.
Crypto Legal Drama #3 – Terraform Labs’ Founder Dances With Extradition
Do Kwon, the man behind Terraform Labs’ seismic collapse following the depeg of Terra USD, has narrowly dodged extradition to the US from Montenegro—for now.
In a further development this afternoon, the Montenegro Supreme Court has annulled the decision to have Kwon extradited to another jurisdiction – South Korea – although his fate from here rests in the hands of a lower court.
Despite his legal victories in the Balkans, the U.S. and South Korea are eager for his extradition over fraud charges tied to his unstable crypto ecosystem Terra Luna, and prosecutors are expected to continue their pursuit.
Crypto Legal Drama #4 – The SEC V. KuCoin
The US Securities and Exchange Commission (SEC) is continuing its crusade against numerous crypto firms, including Coinbase, KuCoin, Kraken, Tron, and Gemini – all battling SEC allegations of selling unregistered securities.
The outcomes of these cases could reshape the regulatory landscape for crypto, and potentially alter the CEX market beyond recognition.
5/ They responded by telling us this lend feature is a security. Ok – seems strange, how can lending be a security? So we ask the SEC to help us understand and share their view. We always make an effort to work proactively with regulators, and keep an open mind.
— Brian Armstrong (@brian_armstrong) September 8, 2021
The Bottom Line: Don’t Forget These Other Minor Crypto Legal Dramas
But while those are the big cases in the year ahead, here are four other legal cases of note happening this year:
- SEC KuCoin: The SEC has charged KuCoin founders Chun “Michael” Gan and Ke “Eric” Tang for not maintaining an anti-money laundering program and running an unlicensed money-transmitting business. Both, who are Chinese nationals, could face up to 10 years in jail but are currently at large.
- Avraham “Avi” Eisenberg: Is the crypto Bernie Madoff whose “highly profitable trading strategy” exploited $117 million of DeFi trading platform Mango Markets. He’s charged with commodities fraud, among other things.
- Tornado Cash: Tornado Cash developer Roman Storm is gearing up for a September trial. He is charged with money laundering and other charges. His co-developer, Roman Semenov, remains elusive and is believed to be in Russia.
- Celsius and SafeMoon Scandals: Alex Mashinsky of Celsius and SafeMoon CEO Braden John Karony face their respective days in court over charges ranging from fraud to money laundering, with decades of jail time on the line.
These cases aren’t just about individual companies or personalities, although for many in the crypto community, this forms a key aspect (as seen in the criticism around Sam Bankman-Fried’s sentencing) they’re about setting precedents that could define the future of cryptocurrency regulation and innovation. Stay tuned as these cases unfold.
EXPLORE: $5 Billion Worth Of Bitcoin Shorts Will Be Liquidated If BTC Rockets Above $75,000
Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
