%1

Binance and its founder, Changpeng Zhao, pleaded guilty Tuesday to violating criminal anti-money-laundering guidelines — a staggering blow against the world’s largest cryptocurrency exchange, the Washington Post reported. The company will also pay a $4.3 billion fine, one of the largest ever levied against a corporation. The plea agreement marks the second time this month that a giant of the crypto world has been felled by federal charges. Zhao, who appeared Tuesday in U.S. District Court in Seattle, faces as much as 18 months in prison for violating the Bank Secrecy Act, according to sentencing guidelines. He will be fined $50 million and is barred from working with the exchange for three years, court filings show. Zhao also agreed to step down as chief executive of Binance. He will be replaced by Richard Teng, the company’s global head of regional markets.

Changpeng “CZ” Zhao has become the latest in a long line of crypto founders facing potentially significant legal consequences, Bloomberg News reported. The founder of Binance Holdings Ltd., the world’s largest crypto exchange, resigned from his post as CEO as part of a settlement agreement with U.S. prosecutors that includes the possibility of jail time. That makes him the newest member of a club that includes Sam Bankman-Fried of FTX, Alex Mashinsky of Celsius, and Do Kwon of Terraform Labs. Zhao, who founded Binance in 2017, developed a reputation for being a canny operator, a fierce competitor, and someone prone to saying things like “I don’t really care much about money” while amassing a fortune measured in the billions. Zhao’s resignation and his near-simultaneous replacement by Richard Teng, who built his reputation not in crypto but at Singapore’s central bank, is emblematic of the kind of shift in approach being pushed by regulators around the world. The landscape for digital assets appears to be shifting away from the “wild west” of crypto populated by risk-loving cowboys who seek forgiveness instead of permission, who publicly spar with the liquidators attempting to recover assets for their creditors, or who use stolen billions to lobby for policy changes.

An involuntary bankruptcy against Mexico’s TV Azteca has been dismissed, with a bankruptcy-court judge saying that the multimedia conglomerate and its bondholders are involved in a dispute that must play out in U.S. district court, WSJ Pro Bankruptcy reported. TV Azteca had been sued over missed payments to bondholders in a case in district court, and then earlier this year an involuntary bankruptcy petition was filed by a group of bondholders in bankruptcy court. Arguing for dismissal of the bankruptcy petition in August, TV Azteca said the sides are in a bona fide dispute, making the involuntary filing improper. It also said the involuntary petition was filed as a tactical maneuver related to a matter pending in another court, and that the U.S. involuntary bankruptcy would hurt the company. To the extent that an in-court reorganization should occur, it should happen in Mexico, TV Azteca said. In Monday’s ruling, Judge Lisa Beckerman said that TV Azteca’s motion to dismiss points to “the district court action as the evidence that the petitioning creditors’ claims are subject to a bona fide dispute.” “The parties specifically agreed in the indenture to submit to the exclusive jurisdiction of the state and federal courts located in the Borough of Manhattan with respect to any disputes regarding the notes and the indenture,” the ruling said. The fight stems from $400 million in unsecured bonds that TV Azteca issued in 2017. Beginning in early 2021, it missed several interest payments, primarily blaming the impact of the COVID-19 pandemic. Last year, certain investors including Contrarian Capital, Invesco and the State Teachers Retirement System of Ohio said the bonds were in default and demanded that interest and principal on the 2024 notes be paid in full.

Airline SAS AB received approval from a bankruptcy court in New York for a $1.2 billion rescue package that will see Air France-KLM and private equity firm Castlelake LP become owners in the Scandinavian flag-carrier, Bloomberg News reported. The company filed for chapter 11 bankruptcy protection in July 2022, saying it faced a significant decline in passenger demand during the COVID-19 pandemic as well as a series of pilot strikes and intense competition from low cost air carriers. The agreement will further consolidate Europe’s aviation industry with Air France-KLM having the option to take a controlling interest after two years under certain conditions. The new shareholder group, which also includes the Danish state and Lind Invest ApS, can now provide the ailing airline with $475 million in new equity and $725 million in secured convertible debt. Castlelake is also lending money to SAS to refinance the $500 million outstanding on a chapter 11 loan provided by Apollo Global Management Inc., which lost out to the Air France-KLM consortium, according to a statement late on Tuesday.

Puerto Rico’s bankruptcy created some debt securities that don’t pay interest, but still managed to deliver an almost $400 million windfall to investors this month, Bloomberg News reported. Called contingent-value instruments, or CVIs, they’re what investors received in March 2022 as part of a debt restructuring deal that cut $22 billion of the commonwealth’s outstanding bonds down to $7.4 billion. The CVIs are taxable securities that resemble zero-coupon bonds — except they do offer investors a chance to collect interest-like payments before the debt expires. This is because they include a provision that calls for holders to receive a payout in November if sales-tax collections for the prior fiscal year surpass projections. So far they have: CVI holders received $362 million in 2022 and $388.7 million on Nov. 1. Some bondholders view the CVIs as a long-term investment. But others see them as trading vehicles, looking to take advantage of price movements because their longer duration makes them more sensitive to interest rates and susceptible to swings, said Daniel Solender, head of municipal debt at Lord Abbett & Co, which holds some of Puerto Rico’s CVIs.

The U.S. Justice Department is seeking more than $4 billion from Binance Holdings Ltd. as part of a proposed resolution of a years-long investigation into the world’s largest cryptocurrency exchange, Bloomberg News reported. Negotiations between the Justice Department and Binance include the possibility that its founder Changpeng Zhao would face criminal charges in the US under an agreement to resolve the probe into alleged money laundering, bank fraud and sanctions violations. Zhao, also known as “CZ,” is residing in the United Arab Emirates, which doesn’t have an extradition treaty with the U.S., but that doesn’t prevent him from coming voluntarily. The BNB cryptocurrency, a token native to Binance and the BNB Chain blockchain that was created by the exchange, rose as much as 8.5% to $266.42 after Bloomberg reported the negotiations.

Telemedicine company UpHealth Holdings agreed to sell subsidiary Cloudbreak Health LLC for $180 million in cash, the South Florida Business Journal reported. The sale to private equity firm GTCR comes two months after Delray Beach-based UpHealth filed for chapter 11 bankruptcy in New York federal court. The company will use the proceeds from the sale to pay debts and cover other expenses. Moving forward, UpHealth will focus on growing TTC Healthcare, described as a "cash flow positive" behavioral health platform. "UpHealth is executing on paying down majority of its debt to our noteholders, with the goal of freeing capital to grow our behavioral health business," said Avi Katz, chairman of the board. CloudBreak Health, a provider of healthcare focused language interpretation services, more than doubled its revenue over the past three years, Katz added. The deal comes two years after UpHealth's merger with GigCapital2 and Cloudbreak Health LLC in 2021. In September, it filed for bankruptcy after a contract dispute with investment bank Needham & Co tied to the merger. A judge ordered UpHealth to pay Needham $31 million.