Binance’s DOJ Settlement Paves the Way for Spot Bitcoin ETF in the US: Matrixport Analyst

Hours after the US Department of Justice (DOJ) and the leading cryptocurrency exchange Binance concluded years-long investigations at a $4.3 billion settlement, an analyst in the crypto company Matrixport stated that the latest turn of events will increase the likelihood of getting approval for the spot Bitcoin exchange-traded fund (ETF).

Binance Settles DOJ for $4.3B

Following years of probing into Binance’s six-year existence, the Justice Department charged the crypto exchange guilty of “money laundering, unlicensed money transmitting, and sanctions violation.” Yesterday, the crypto giant pled guilty and agreed to a settlement of $4.3 billion, the largest ever paid by a corporation for criminal offences.

Part of the settlement involved Binance’s founder, Changpeng Zhao (CZ), stepping down from his CEO role. The company’s former Global Head of Regional Markets, Richard Teng, is the newly appointed CEO.

The Matrixport analyst stated that Binance’s fine could have been as much as $10 billion. However, with a $4.3 billion settlement fee, the analyst believes this will keep the company among the top three crypto exchanges over the next two to three years.

Notably, the crypto market stomached the event, with Bitcoin seeing only a 1.9% decline in the past 24 hours and global market capitalization dropping by 1.93%.

How It Affects Spot Bitcoin ETF Approval

Spot Bitcoin ETF has been a much sought-after asset among traditional financial companies in the United States. The product allows TradFi firms to offer a Bitcoin-backed asset to U.S.-based investors. 

Companies such as Grayscale, BlackRock, WisdomTree, and others have filed for a spot bitcoin ETF with the U.S. Securities and Exchange Commission (SEC). However, a green light has yet to be issued by the financial regulator.

The Matrixport analyst believes that the settlement between Binance and the DOJ will fast-track the likelihood that the SEC will soon approve a spot Bitcoin ETF.

“More exchanges will enhance their compliance programs and become part of a surveillance-sharing agreement, which will be instrumental in approving a spot Bitcoin ETF in the US,” the analyst wrote.

This way, more crypto platforms might lean towards regulation and “be forced to follow the rules that TradFi firms must follow.”