Why the Crypto Industry Ignores Binance and FTX Fears

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Last week, Sam Bankman-Fried, founder of bankrupt cryptocurrency exchange FTX, was finally apprehended by Bahamian authorities.

This marks the end of a dark chapter in crypto history that resulted in the purge of a number of bad actors, clearing the way for the industry to move forward and integrate into the next market cycle.

While we’re all glad to see Mr. Bankman-Fried behind bars, the current allegations against FTX’s biggest competitor, Binance, are questionable.

On the same day that Mr. Bankman-Fried was apprehended, news emerged that federal prosecutors in the United States were planning to press charges against Binance bosses, including chief executive and founder Changpeng CZ Zhao, for money laundering. alleged and violations of criminal penalties.

The Justice Department has been discussing possible plea deals with Binances lawyers following a series of cases in 2018 in which criminals allegedly used Binance to transfer illicit funds, Reuters reported.

Tigran Gambaryan, Head of Intelligence and Investigations at Binances, responded to this by saying that the company has, in fact, responded to over 47,000 requests from law enforcement since November 2021.

In addition to the accusations, investors have apparently shunned Binance over fears fueled by its reserves report released earlier in December, which some experts say is not detailed enough. This has led to approximately $2 billion in withdrawals from the exchange, as of December 14.

Politics or personal vendetta?

Originally founded in China and currently registered in the Cayman Islands, with subsidiaries in some 40 locations around the world, Binance has always operated in a regulatory gray area, no doubt causing headaches for global regulators.

So it’s no surprise that as global watchdogs focus their attention on the crypto sector, Binance is caught in the crossfire.

Still, it’s hard not to see a degree of political expediency at play here.

Mr. Zhao has worked in the blockchain and crypto industry since 2014, evolving it both as a centralized institution and also developing decentralized finance through the Binance smart chain and decentralized solutions like PancakeSwap and d ‘others.

Binance has been scaled with ingenuity, competitiveness, and a focus on executing and meeting customer demands at all times.

It has never, despite hacks and crashes, lost customer funds. Indeed, the fact that $2 billion was transparently mined from the platform shows that there is no liquidity problem.

Mr. Zhao and Binance are also operational and licensed in many jurisdictions in Asia and the EU and have a separate entity, Binance US, licensed and regulated in the United States.

Mr. Zhao is a Canadian citizen of Chinese descent who owns Binace 100%. He has worked tirelessly to grow the Binance business with passion, dedication, and integrity, and it is disappointing to see the circumstances under which charges are being leveled against him.

Dramatic fatigue sets in

Despite political wrangling, however, markets are holding up.

From a cycle low of $15,599, Bitcoin recently climbed above $18,000, while Ethereum (ETH) was trading near the $1,300 mark, against a low of $1,081 on November 22.

The market pulled back somewhat on warnings from the US Federal Reserve that we have yet to see an end to rate hikes, however, signals remain positive.

Data from analytics firm Santiment shows that addresses already holding large amounts of ETH have further increased their holdings.

CryptoQuant’s on-chain data recently put an end to concerns about Binances’ balance sheet with a recent report showing that exchange reserves are 89% clean, meaning they consist of third-party assets not operated by Binance .

Cryptocurrencies in pictures

The crypto market, which includes currencies such as Bitcoin, pictured has lost $2 trillion in value in six months. Unsplash

Meanwhile, crypto companies are doing what they do best during bear markets: hanging their heads and building the future of decentralized finance.

According to the H2 2022 Developer Survey conducted by Hiro, a web3 developer toolkit, 55% of respondents said the bear market has only fueled their desire to create innovations in this space.

Many lessons will be learned from the collapse of UST, Celsius, FTX et al this year, lessons that will ultimately lead to a stronger and truly decentralized cryptocurrency ecosystem of the future.

Those suggesting that crypto is down following recent events have failed to understand how resilient this space is and how talented those driving it are.

Far from dead, crypto is about to experience its brightest dawn yet.

Stefan Rust is the founder of Laguna Labs, a blockchain development house, and former CEO of bitcoin.com

Updated: December 21, 2022, 04:00

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