The recent guilty plea of Binance and its CEO for money laundering charges has raised questions about the company’s massive movement of stablecoins before the settlement.
A $3.9 billion transaction in Tether (USDT) on November 9 closely matches Binance’s $4.3 billion penalty in the settlement. Most of these funds shifted from one Binance cold wallet (Binance-Cold 2) to another (Binance 3). Currently, Binance-Cold 2 holds $6.6 billion, with $4 billion in USDT and the remainder in various stablecoins like Decentralized USD (USDD), USDC, and TrueUSD (TUSD).
Meanwhile, the destination wallet now contains $3.2 billion, primarily in Tether’s USDT stablecoin. Binance’s cold wallets are known to hold a significant portion of the company’s funds.
See Related: FTX Co-Founder Pleads Guilty To Fraud Charges
It remains uncertain if these funds will be used to cover the U.S. government’s fine or converted into U.S. dollars or another fiat currency. Binance has not responded. Tether, with 88.3 billion USDT tokens in circulation, is the largest stablecoin in the industry, accounting for 6% of the global crypto market capitalization.
Its closest competitor, USDC, has a $24 billion market cap. However, Tether has faced regulatory scrutiny for years. Binance CEO’s guilty plea for money laundering has raised concerns about the stablecoins.
Total Fine Imposed On Binance and CEO
The USDT transfer occurred just before Binance and CEO Changpeng Zhao agreed to pay $1.8 billion in criminal fines, with an additional $2.5 billion in forfeitures, including $1.6 billion for settlements with regulatory bodies like the CFTC, FinCEN, and OFAC.
Zhao stepped down as CEO as part of the settlement, concluding lengthy investigations into Binance’s regulatory compliance and anti-money laundering controls by U.S. authorities.