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Amid a busy week of crypto news—including a surprise Bitcoin rally and a wave of activity from the Securities and Exchange Commission—there was a big development that got largely overlooked. Namely, as the Wall Street Journal reported, Binance has claimed it is on the cusp of a settlement with U.S regulators that will see it pay fines to “make amends” for its many legal transgressions in recent years.

This jibes with what I’ve heard from someone close to the company, who recently told me that an impending settlement would see Binance resolve not only a long-running Justice Department investigation but also its troubles with other federal agencies as well as state regulators. If this comes to pass, such a sweeping deal would have huge implications for both Binance and the crypto industry.

A clean settlement between Binance and U.S. regulators would likely trigger a broad bump in crypto prices as traders took comfort in the fact that the company was in the clear from the ongoing FTX fallout. And Binance, which is the biggest and probably the most innovative company in crypto, could charge ahead with expansion plans in the U.S. and elsewhere. Clear of the regulatory sword that has been looming over it for years, Binance could join the likes of Coinbase and Circle as a respected and stabilizing force for crypto.

But all of this depends on the predicted settlement actually coming together, and the nature of the penalties that regulators impose. Given the ferocious recent push by the Biden Administration to go after crypto, which has included siccing the banking agencies on the industry as well as a wave of SEC lawsuits, any fines against Binance are likely to be severe.

Binance will likely be able to absorb even massive fines since, based on conversations I’ve had with the company’s rivals, the consensus appears to be that its pockets are very deep—though given the black box that is Binance’s balance sheet and reserves, it’s hard to know for sure. There is also the question of whether any settlement would include provisions that limit where the company can operate or what products it can offer. If any deal effectively cripples Binance’s operations, it will be a hollow one indeed.

Finally, there is the question of whether the U.S. political environment will permit a settlement in the first place. Binance has taken big steps to demonstrate that it is serious about shedding its renegade culture in favor of one focused on compliance—this has included hiring numerous former IRS and law enforcement agents, and staffing its U.S. subsidiary with respected American executives. But that might not be enough for Binance to overcome both its checkered past and a campaign by its rivals and security hawks to portray the company and its founder—perhaps unfairly—as tied to China.

It’s impossible for now to say with certainty how all of this will shake up. But the outcome of a possible settlement between Binance and U.S. regulators will be a game changer no matter how it turns out.

In observance of Presidents’ Day, Fortune Crypto will be off Monday but will return to your inbox on Tuesday, Feb. 21.

Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts

DECENTRALIZED NEWS

Bitcoin surged past $25,000 this week in part thanks to the popularity of a new type of NFT known as ordinals. (Fortune)

Binance may terminate relationships with U.S. banking partners and delist U.S.-based assets like the USDC stablecoin in response to intense pressure from regulators. (Bloomberg)

The Public Company Accounting Oversight Board, overseen by the SEC, is facing pressure to introduce rules to standardize crypto audits. (WSJ)

The SEC charged Do Kwon, the fugitive founder of the failed Terra and Luna tokens, with carrying out a multibillion-dollar fraud. (CNBC)

The crypto industry spent roughly the same amount on lobbying last quarter as it did previously, showing that political spending remains a priority in the bear market. (Fortune)