Bitcoin sinks to its lowest level since February to start May: CNBC Crypto World

Bitcoin sinks to its lowest level since February to start May: CNBC Crypto World

today the month of May kicks off with a
major Bitcoin pullback Federal
prosecutors reportedly question payment
processor blocks former employees about
its compliance practices and Liz laado
of The Verge breaks down what it was
like in the courtroom when shank panga
was sentenced to 4 months in
prison welcome to cnbc’s crypto world
I’m Talia Kaplan cryptocurrencies are
firmly in the red to kick off the new
month by noon Eastern Bitcoin tumbled 6%
adding to yesterday’s losses the
cryptocurrency fell as low as
$56,500 the lowest level since February
27th meanwhile ethers also moving lower
this morning falling
3.6% and Below
$2,900 salana dropped 3.5% to
$123 okay let’s talk about the top
stories Federal prosecutors are
reportedly digging into the internal
practices at payments Giant block the
parent company of cash app and square
according to NBC News former employees
claimed to prosecutors in the southern
district of New York that block
participated in widespread and yearslong
compliance lapses NBC news reports that
a former employee provided documents
that allegedly show insufficient
information collected from square and
cash app customers to assess their risk
and that square allegedly processed
transactions involving countries under
sanctions most of those transactions
reportedly discussed C which included
credit cards dollar transfers and
Bitcoin were allegedly not reported to
the government as required the southern
district of New York declined to comment
on this story we also reached out to
block but didn’t hear back yet next the
Department of Justice is accusing a
crypto influencer an early Bitcoin
adopter of evading nearly $50 million in
taxes the doj unsealed the indictment
yesterday charging Roger ver also known
as Bitcoin Jesus with mail fraud tax
evasion and filing false tax returns the
doj alleges that he gave up his US
citizenship in 2014 and provided false
information to a law firm helping with
his expatriation process by undervaluing
the Bitcoin Holdings belonging to him
and his companies prosecutors also claim
he sold tens of thousands of Bitcoin in
2017 for around $240 million which he
was required to report and pay taxes on
but hid from his accountant ver was
arrested in Spain over the weekend and
the US plans to extradite him for his
trial we reached out to ver but didn’t
hear back right away finally binance’s
ex CEO Shen Pang Xiao has been sentenced
to four months in prison for money
laundering violations that sentence
handed down from a federal judge in
Washington is less than the 3 years
prosecutors were pushing for and less
than the sentencing guidelines of 12 to
18 months in remarks to the court Xiao
reportedly struck an apologetic note and
said that he failed to implement an
adequate anti-money laundering program
and that he recognized the seriousness
of his mistake now this shortened prison
sentence comes after Cy struck a deal
with us prosecutors to resolve a
multi-year investigation into binance in
that deal Xiao agreed to step down and
pay a $50 million fine while binance
itself paid $4.3 billion in a statement
to CNBC a binance spokesperson said that
the exchange is proud of the culture of
compliance security and transparency
over the past several years and we look
forward to building on that culture as
we continue to evolve they added that
the company had made considerable
compliance enhancements meanwhile Xiao
posted on X last night that he would do
his time conclude this phase and focus
on the next chapter of his life which he
says is
education all right let’s keep talking
about CZ for our main story crypto
world’s Jordan Smith spoke with Liz
laado senior reporter at The Verge who
was in the courtroom during Xiao
sentencing she breaks down that prison
sentence and how it Stacks up against
the last court case we spoke to her
about Sam bman
Freeds Liz welcome back this is the
second time you’ve been on the show
first for the trial of Sam bakman freed
and now for the sentencing of Shang Pang
Xiao both times you were in the
courtroom um but these were very very
different environments uh and what was
it like sitting in the courtroom for
this hearing and how the judge sort of
approach how did the judge sort of
approach this sentencing a four months
for CZ um and let me know whether you
think that the sentence which was below
the guidelines was what you were
expecting so first of all you know I’m
here in Seattle and so there was much
less of a scrum of people trying to get
into the courtroom um so that was a big
difference it was just much less much
less of a crowd um and in some ways it
felt a little anticlimactic right like
there wasn’t the same kind of
um I don’t know drama around this you
know there had been a plead deal um CZ
had you know made whatever whatever deal
he had made with the feds and and um it
was just it was a very sort of different
environment in that sense and when it
comes to the sentencing
um listen I it’s lenient enough that I’m
really curious about a sealed matter
that was uh referred to repeatedly in
court because if you think about it and
you think about all the things that were
alleged in the complaint and all of the
things that were alleged in like the
cftc lawsuit and the SEC lawsuit all of
which now settled um it kind of seems
like there was a lot of evidence for a
lot of stuff and yet we have uh CZ
pleading to um only one charge and it’s
a charge that doesn’t carry a lot of
time and he’s getting sentenced for four
months which is less than um the
probation Department’s recommendation so
it makes me wonder what exactly he gave
the feds just to be blunt about it you
know um whether it’s just that you know
it’s really they’re they’re able to
better surveil
um whatever is going on in binance
whether they have a record of
transactions all of that stuff uh it
seems like there’s some piece of this
that we’re missing and I know it has to
do with cooperation because that was
mentioned in open
court yeah I was going to ask you about
that because it seemed to come up time
and time again um throughout this
hearing and I was wondering if if you
had any sort of inkling as to what this
might be this matter that is under seal
or if we just we just don’t know when we
may we may not know for some time we
don’t know we may not know for some time
I can imagine that getting access to
binance would be really valuable for a
whole alphabet soup of government
agencies um it’s also you know there was
there were referen to terrorist groups
there were reference to sanctioned
countries um those things can
potentially be valuable there may also
be things that we haven’t even thought
about that are valuable you know um and
then CZ of course is a really central
figure
in crypto and binance is a really
Central Exchange in crypto so it it
could quite literally be anything um but
whatever it is it’s got to be relatively
big for CZ to have gotten off this light
and I think maybe that’s part of the
reason we’re in Seattle because if you
think about it you know this is maybe an
unusual jurisdiction to be pursuing this
particular complaint so I just I have a
lot of questions about um how we wound
up up here in the first place and and
what we don’t know that I I think more
so than I did when I walked into that
courtroom I’m curious about the remarks
that CZ gave in court um talk about the
the tone that he took uh when giving
those remarks because he seemed pretty
apologetic he seemed to be remorseful
but did that did that translate in the
room I would say so he seemed he was
very softspoken um and he was very
attentive to whoever was speaking when
the judge was you know reading out the
sentence he was nodding along um but
there was there was a real sense in
which he was trying to show that he had
accepted that he had done crimes and
that he was trying to repent and that
was like a real distinction from what I
saw with Sam bankman freed who you know
he came in and gave a really bizarre
statement about how he hoped somebody
would build what he thought FTX could
have been and it it sort of amounted to
him saying something like I would do
this again which the judge in that case
also picked up on and which I suspect
influenced the sentence um so there was
a
um I guess a level of reality I think
with CZ that we didn’t see with SPF like
CZ understood what he was
facing um you know he understood what he
needed to do in order to try to get his
light of a sentence as possible and was
willing to do it um there was just a
level it was you know was watching
somebody who’s accomplished businessmen
like finish off a deal that maybe isn’t
the best deal for him but the best deal
he’s going to get under the
circumstances yeah I think one of the
things we heard time and time again
during the SPF trial was that he’s not
doing himself any F favors every time
that he spoke he was digging a deeper
and deeper hole for him whereas it
didn’t seem like that was the case with
CZ and I’m wondering you know knowing
what we heard from him in court
yesterday if that that apologetic tone
that he took helped ultimately lessen
the sentence that he got or if you think
this was a situation of somebody who had
a lot of money and really good lawyers
helped work a deal that actually got him
the four months or if it was actually
the tone that he took it’s a good
question I think it was all of those
things I also think you know the judge
made
reference to letters that he received um
unsolicited letters about CZ um and he
had like a little binder that he
referenced having read um and said that
that had really influenced his judgment
as well and that his picture of
CZ um was relatively positive and that
he didn’t think CZ was likely to
reoffend you know which again that’s a
very distinct difference from what we
saw with Sam bankman freed where there
wasn’t you know this enormous binder of
letters and there wasn’t the sense that
you know aside from a specific business
decision that had been made um he had
mostly been a good boy right like
CZ made a business calculation which was
referenced in court that it was better
to ask forgiveness than permission and
that was something that the judge
brought up as being part of the reason
why he had assigned prison time that
that like specific calculation you know
was not something he wanted to reward
but aside from that he didn’t see any
problems with CZ um you know as as a as
a potential threat to the public let’s
say if you were allowed to
uh be free
again yeah there’s something I want to
go back to that you said back when we
were talking about the S SPF trial um
you were making this point that time and
time again in the crypto industry people
point to these cases and say you know
this is just one bad apple this is this
is something that’s just off to the side
this isn’t the industry as a whole and
you made a reference to somebody in the
courtroom asking about binance and and
whether everything was above board there
and then you know now we see six months
later where things stand with that I’m
wondering if you feel as though we’re
still in that sort of environment in the
crypto space where you know people are
still have still have this mindset of oh
it’s just you know one case off to the
side or if people are starting to feel
like this is a more widespread problem
that needs to be addressed where do we
stand in that senent I think that
there’s a there’s still sort of a
widespread denial of the lessons that we
could have learned from you know that
particular cycle because in some ways
this sort of puts a cap on that
particular bull run right like these
were the two key players
there and I haven’t seen any real change
in the industry aside from the approval
of some you know Bitcoin ETFs and I
don’t know that we’re going to
necessarily get um people coming into
the industry I think the people who are
already there are going to stay there
are going to continue doing whatever
they’re doing but if you are looking to
bring in Outsiders there does need to be
substantial change and I haven’t seen
really any of that kind of change occur
and so I think to some degree the the
you know these are just a couple of bad
apples explanations are a way of
resisting the kind of change that could
potentially lead to uh you know a
different outcome um and so I sort of
expect something like this to happen
again okay that’s all for crypto world
today but we’ll be back again tomorrow
and we’ll see you then
[Music]

CNBC Crypto World features the latest news and daily trading updates from the digital currency markets and provides viewers with a look at what’s ahead with high-profile interviews, explainers, and unique stories from the ever-changing crypto industry. On today’s show, Liz Lopatto of The Verge discusses the sentencing of ex-Binance CEO Changpeng Zhao, who received four months in prison over money laundering violations.

Chapters:
00:00 – CNBC Crypto World, May 1, 2024
0:27 – Bitcoin dips
0:53 – The headlines
4:01 – The Verge’s Liz Lopatto

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Bitcoin sinks to its lowest level since February to start May: CNBC Crypto World