Bitcoin, the world’s largest cryptocurrency by market capitalization, has suffered a major blow after Binance, the world’s largest crypto exchange by trading volume, admitted to violating US laws and regulations.

On Friday, Binance CEO Changpeng Zhao, also known as CZ, pleaded guilty to charges of money laundering, operating an unlicensed money transmitting business, and failing to register with the Financial Crimes Enforcement Network (FinCEN) in the US District Court for the Southern District of New York. He agreed to pay a fine of $250 million and cooperate with the authorities in their ongoing investigations.

According to the court documents, Binance had knowingly allowed US customers to trade on its platform without complying with the anti-money laundering (AML) and know-your-customer (KYC) requirements. Binance also used a network of shell companies and third-party payment processors to evade detection and conceal the source and destination of its funds.

The settlement marks another significant blow to the cryptocurrency industry, which has faced increasing scrutiny and investigations from regulators and law enforcement agencies around the world. The US Securities and Exchange Commission (SEC) has been cracking down on crypto-related products and services, especially those involving unregistered securities or derivatives. The SEC has also postponed its decision on several applications for spot Bitcoin exchange-traded funds (ETFs), citing market manipulation concerns and the need for public input.

The news of Binance’s legal troubles sent shockwaves across the crypto market, triggering a sell-off that dragged down the prices of most major cryptocurrencies. Bitcoin, which had been trading above $38,000 on Thursday, fell below $36,500 on Friday, losing about 3% of its value. Other leading cryptocurrencies, such as Ethereum, Binance Coin, XRP, and Solana, also suffered losses ranging from 5% to 11%.

The crypto community is now wondering whether Binance’s woes will have a lasting impact on the industry and its prospects. Some analysts believe that Binance’s admission of guilt could pave the way for more regulatory clarity and compliance in the crypto space, while others fear that it could deter investors and innovation. Binance’s fate could also influence the outcome of other pending cases involving crypto firms, such as Ripple, BitMEX, and Tether.

Despite the challenges and uncertainties, some crypto enthusiasts remain optimistic about the future of Bitcoin and other cryptocurrencies. They argue that the fundamentals of the technology and the network are still strong and that the demand and adoption of crypto will continue to grow. They also point out that Bitcoin has survived and recovered from many previous crises and that the current dip could be a buying opportunity for long-term investors.