Category Archives: Binance
Binance and Miami Heats Jimmy Butler Hit With $1B Crypto Lawsuit – Decrypt
Lawyers have hit Binance, its CEO, and several celebrities and influencersincluding NBA star Jimmy Butlerwith a $1 billion civil lawsuit for shilling cryptocurrency.
Filed on Friday by The Moskowitz Law Firm and Boies Schiller Flexner, the lawsuit states that Binance boss Changpeng Zhao and his crypto exchange touted unregistered securities and paid celebrities to help do so.
Following a year-long investigation, the lawyers said they are now seeking $1 billion in damages.
The lawsuit came days after the Commodity Futures Trading Commission (CFTC) separately sued Binance, alleging that the massive company violated trading and derivatives rules.
Binance partnered with defendants to promote Binance and solicit new customers, including through traditional advertisements on television and social media with contracting with nationally recognized Brand Ambassadors, such as Miami Heats Jimmy Butler, a Moskowitz statement shared with Decrypt read.
Binance could not have arisen to such great heights without the massive impact of these influencers, who hyped these unregistered securities for payments of multimillion dollars, the statement continued.
The lawsuit also mentions YouTubers and influencers Ben Armstrongknown as BitBoy Cryptoand Graham Stephan as defendants who allegedly received kickbacks for getting people to sign up to Binance.
Binance is the worlds biggest crypto exchange and its native token, BNB, is the fourth largest digital asset, with a market cap of $48.8 billion.
U.S. authorities are increasingly keeping an eye on the massive exchange and how it is run.
Fridays lawsuit specifically mentions BNB and how its burn rate (the number of tokens taken out of circulation) is determined by Zhao, representing a classic example of a centralized exchange, which is promoting the sale of an unregistered security.
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Binance and Miami Heats Jimmy Butler Hit With $1B Crypto Lawsuit - Decrypt
Binance Faces Backlash Over BUSD Operations Amid Scrutiny – BeInCrypto
Binance has converted over 800 million BUSD from its Recovery Fund to other cryptocurrencies amid heightened U.S. scrutiny on stablecoins. Regulators like the SEC and CFTC are looking to enact strict rules on stablecoins and other cryptocurrencies.
The recent scrutiny and FUD (fear, uncertainty, and doubt) surrounding Binance and its affiliated BUSD (Binance USD) stablecoin have raised questions about its safety and reserves as a digital asset.
While it is true that regulatory scrutiny and negative press can cause fluctuations in the value of any digital asset, it is essential to understand the specific concerns and evaluate the overall safety of BUSD as an investment.
One of the main concerns surrounding BUSD is its association with Binance, a cryptocurrency exchange that has faced increased regulatory scrutiny in recent months. The exchange and its CEO, Changpeng CZ Zhao, have been accused of trading violations by the United States Commodity Futures Trading Commission.
On top of the CFTC allegations, the chief executive alsofacesa $1B lawsuit for promoting unregistered securities. But the drama continues to see new twists and turns. Of late, unverifiedrumorscirculated about Zhao being issued an Interpol Red Notice, insinuating that hes wanted for arrest.
As a result, some regulators have restricted or banned Binances operations in their jurisdictions. Consequently, many users rushed to pull their funds off the exchange,accountingfor more than $1.5 billion per its March report.
Despite the Binance team taking steps to clear the air, its native BNB coin witnessed a 4% price plunge that has since mostly recovered.
But this isnt the onlygray patchregarding Binance and its operations.
Its important to understand that there are two versions of the Binance stablecoin a Binance-pegged BUSD and the Ethereum-based Paxos-backed BUSD stablecoin. The stablecoins collective collateral backing may not be fully transparent according to findings.
On Jan. 11, Binances representativeconfessedflaws and early operational issues with its BUSD stablecoin. The acknowledgment by Binance comes as the exchangefaceda mountain of public scrutiny over its finances and missing collateral.
Later the following month, Paxos, the BUSD token provider,endedits partnership with Binance. Aligning with the regulators notice, Paxos halted minting BUSD, which directlyaffectedthe stablecoins peg to the U.S. dollar. The situation worsened after witnessing the failure of three crypto-friendly banks.
Amid the concern mounting around stablecoins, Changpeng Zhaoasserted that with the changes in stablecoins and banks, the exchange will be converting the remaining $1 billion funds in its Industry Recovery Initiative to native crypto. These cryptocurrencies included BTC, BNB, and ETH.
Theswap, per Binance, wasnecessaryfollowing Paxos decision to stop minting BUSD, resulting in a gradual market cap reduction. The BUSD supply continues to fall, down to around $113 million worth of BUSD left in the Binance Fund Wallet.
Overall, Binance has converted over 800 million BUSD to other cryptos from its Recovery Fund. This triggered an array of narratives. Some replies to Zhao compared the situation to what FTX was doing before its downfall.
Further concerns were raised after areportaccused Binance of commingling different types of assets in the same corporate wallets.
The worlds highest-volume crypto exchange exiting its own stablecoin amid heightened U.S. scrutiny has caused a lot of panic. The exchanges mass stablecoin withdrawals were shown in a recent Glassnode report.
The graph above shows that Binance Net Flow Volume for all stablecoins has recently seen larger outflows than inflows to the tune of -$295M/day, which is the largest net outflow in history.
Zooming in, BUSD lost a massive chunk in dominancecomparedto stablecoin rivals USDT and USDC. Many investors redeemed or converted BUSD into other assets, driving the total BUSD supply down by -52% to $7.7B, Glassnode added.
At the time of writing, BUSD is trading slightly under its peg at $0.9996. BeInCrypto reached out to Binances team for comment but hasnt received a reply.
One crypto analyst,Adam Cochran, told BeInCrypto:
I dont think Binance is anywhere near as bad as FTX in terms of brazen misuse of funds or having like $0 backing. But I also dont think its 1:1 and safe, and I wouldnt assume BUSD to be $1 when its sitting on an exchange or on BSC.
Can the situation really go from bad to worse, given the uncertainty around stablecoins?
Binance, directly or indirectly, was forced to cut BUSD supply amid regulatory chaos. U.S. regulators have been taking a closer look at centralized stablecoins like BUSD. In fact, the U.S. Treasury Department proposed new rules requiring stablecoin issuers to maintain reserves of the underlying assets backing their coins. They must also provide regular reports on those reserves to regulators.
The main concern is that stablecoins could risk financial stability if assets of sufficient quality and liquidity do not adequately back them. Regulators worry that if a stablecoin issuer were to experience financial difficulties, it could trigger a run on the stablecoin and cause widespread market disruption.
In response to these concerns, Congress isworkingon a bill that could make stablecoins depegs a thing of the past. The McWaters Bill aims to incorporate three key points: Mitigating the risk of future depegs, making sure stablecoins are NOT classified as securities, and wresting stablecoin regulation from the SEC.
Overall, the bill could inject much-needed clarity for stablecoins.
Following the Trust Project guidelines, this feature article presents opinions and perspectives from industry experts or individuals. BeInCrypto is dedicated to transparent reporting, but the views expressed in this article do not necessarily reflect those of BeInCrypto or its staff. Readers should verify information independently and consult with a professional before making decisions based on this content.
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Binance Faces Backlash Over BUSD Operations Amid Scrutiny - BeInCrypto
Binance burns 1.6 billion LUNC, heres how the token reacted – AMBCrypto News
As part of its monthly routine, cryptocurrency exchange Binance burned another round of Terra Classic [LUNC] tokens, Terra Finder disclosed. The 1 April action saw the exchange, which committed to the LUNC community proposal last year, burn over 1.6 billion LUNC.
Realistic or not, heres LUNCs market cap in BNBs terms
Binance embraced the burning of 50% of the trading fees received from spot and margin positions after the projects community 1.2% tax proposal. Although there was a proposal for 100% of the fees at some point, the community voted against it.
The latest burn marks the eighth time that the exchange burnt LUNC tokens. The burning was aimed at decreasing the token supply and increasing its value over time. About 8.9 billion tokens were burned last time and in total, 30.5 billion tokens have been burnt as of now.
However, LUNC failed to pick up a reaction despite the burning. At the time of writing, the token value only managed a 0.75% uptick, declining to overcome the bearish state it was accustomed to in the last 30 days.
LUNC has previously had instances where the price increased or decreased significantly as a result of the burning. Other times, there was little to no reaction.
At press time, the LUNC volatility was at an extraordinarily low level, based on indications from the Bollinger Bands (BB). This indicated that the token could be about to navigate a move in either direction. However, the LUNC price at 0.00012 touched neither the upper nor lower band.
As for the On-Balance-Volume (OBV), it rose to 43.55 billion at press time. The indicator adds up the volume on uptrends and subtracts the volume on downtrends. But since it was positive, it signals that LUNC could hit a potential bullish path.
As of this writing, LUNCs market capitalization was 743.76 million. This means that the project has been able to maintain its popularity, dominance, and circulating supply by remaining in the top 100.
Is your portfolio green? Check the Terra Classic Profit Calculator
Although there were no signs that it could range above the current 62nd position, developers have been operating on its ecosystem. According to Santiment, the development activity increased to 8.19 after a small decline on 29 March.
The metric tracks the work done in public concerning upgrades on a product. So, this means Terra Classic was able to prevent a developer exodus.
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Binance burns 1.6 billion LUNC, heres how the token reacted - AMBCrypto News
Binance: Could CFTC Lead To Bigger Problems? (Cryptocurrency … – Seeking Alpha
IgorIgorevich/iStock Editorial via Getty Images
It seems like each week in 2023 has provided a fresh set of bombs lobbed at the cryptocurrency industry from US regulators, and this week was no different. A new battlefront has emerged, and this one involves Binance (BNB-USD), the company's founder Changpeng "CZ" Zhao, and the Commodity and Futures Trade Commission. On Monday, the CFTC sued Binance and claimed eight infractions according to the Commodity Exchange Act:
The lawsuit, filed in federal court in Chicago, Illinois, alleged that Binance, the world's largest crypto exchange, solicited U.S. users via unregistered crypto derivatives offerings despite having no authority to conduct business in the country.
The lawsuit alleges Binance employees nudged US users to utilize VPN services to obfuscate location to enable usage of Binance's off-shore full site rather than the more slimmed-down US front-end application. Binance is the top global crypto exchange by trade volume and also offers DeFi optionality through its Binance Smart Chain, the native token of which is BNB. The BNB token is different from Binance USD (BUSD-USD), which I've covered for Seeking Alpha in the past.
Unlike the FTX (FTT-USD) situation from November, we don't have a leak of Binance's internal balance sheet. Because of that, it's difficult (if not impossible) to assess what the solvency situation is for Binance as an exchange from the outside looking in. The Wall Street Journal recently reported over $2 billion in Ethereum-based (ETH-USD) outflows in response to the CFTC lawsuit. The overwhelming majority of that outflow has been in the stablecoins. And it's really just a continuation of what we've been seeing for months already:
Binance Exchange Balance (Dune Analytics/KARTOD)
On November 10th, Binance had a total stablecoin reserve balance of $26.2 billion. This would have been during the time the FTX drama really started to intensify. Since then, stables on Binance have fallen 60% down to $10.5 billion as of Thursday.
Source: Dune Analytics/KARTOD
While BUSD has certainly been a part of that outflow, as a percentage of total funds pre-CFTC allegations, BUSD actually hasn't been leaving Binance exchange as much as other stables have over the last week.
BUSD Circulating MC (CoinMarketCap)
However, it's also important to note that BUSD is issued by Paxos Trust. So even though there has been a significant spike in BUSD redemptions over the last several weeks, it is a different entity that is handling those redemptions. So far, there hasn't been any break in the BUSD peg like we witnessed in USDC earlier this month. But I will reiterate that I don't personally advocate holding any of these centrally issued fiat-collateralized stablecoins if you're even slightly worried about third-party risk.
Rank
Exchange
BTC Balance
24H Change
7D Change
30D Change
Binance
540,759.59
+4,178.59
+1,787.00
+12,570.72
Coinbase (COIN)
488,019.53
-146.46
+3,522.01
-2,507.28
Bitfinex
347,975.65
-4,836.59
-5,524.48
+2,919.40
OKX
123,169.65
-437.15
-1,585.94
-3,267.16
Gemini
107,892.06
-2,858.53
-17,359.23
-21,910.26
Source: Coinglass, as of 3/31
Despite the outflow in Ethereum-based stablecoins, Binance has actually seen Bitcoin (BTC-USD) inflow over the last week. Which is not typical compared to other centralized crypto exchanges.
Aside from the fact that FTX customer funds made their way to Alameda Research balance sheets, what made FTT such an important instrument in the demise of both Alameda and FTX was that it was so tantamount to Alameda's solvency. This isn't explicitly the case with Binance because BNB is a much smaller portion of Binance's known wallet holdings according to this Nansen proof of reserves balance sheet:
Binance Balance Allocation (Nansen)
Just 5.3% of the $65 billion in known Binance-controlled wallets are made up of BNB, according to Nansen. This would seem to indicate BNB will not be as detrimental to Binance solvency if the CFTC lawsuit somehow leads to a dramatic BNB token price decline. Importantly, Binance's proof of reserves shows a BNB position only totaling about 10% of the BNB in circulation.
However, utilizing on-chain wallet tracking it has been estimated by independent analysts that Binance actually controls far more BNB than its proof of reserves here indicates; possibly as much as 80% of BNB's circulating supply is under Binance control either directly or indirectly through employee holdings. Furthermore, we don't have the full scope on Binance's financial position because we only know what Binance's claimed assets are, we don't have clarity on the liabilities. That's a huge missing piece. And Binance's BNB position could be dramatically understated, according to chain sleuths.
There is a market expectation that Binance will settle with CFTC and pay a fine. It remains to be seen if that will happen and if so how big the settlement would be. But Binance could be in a tough position if this situation drags out for a long time. From where I sit, Binance does not have a reputation for being a leader in transparency and the blockchain itself is generally one of the more centralized chains in crypto by total validators. As investors, we can only make assessments based off what we know and what we can reasonably assume. Personally, I think the risk probably outweighs the reward in BNB.
Editor's Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.
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Binance: Could CFTC Lead To Bigger Problems? (Cryptocurrency ... - Seeking Alpha
Ripple (XRP) Explodes 20% Unfazed by Binance-CFTC Lawsuit, Bitcoin Consolidates: This Weeks Crypto R… – CryptoPotato
The past seven days made for quite an exciting week in the cryptocurrency field, despite the fact that some of the events werent particularly positive. However, the market managed to stabilize and consolidate, gaining around $14 billion in the process. Lets dive in.
On March 27th, the United States Commodities and Futures Trading Commission (CFTC) slapped Binance the worlds leading cryptocurrency exchange with a lawsuit. The 74-page complaint also included its CEO, Changpeng Zhao, and outlines multiple allegations, including that of neglecting the implementation of controls that would prevent illicit finance.
The complaint goes on and on, and you can find some of the details here. Its worth mentioning, though, that as soon as the news broke out, bitcoins price tumbled by about $1400 almost immediately. This also dragged the entire market through the mud, wiping billions off the total capitalization rapidly.
Fortunately, things appear to have calmed down, and, at the time of this writing, BTC trades at around where it was before the lawsuit. The same is true for Ethereum. However, some of the other leading altcoins, such as BNB, DOGE, MATIC, and SOL, are all trading in the red.
The most obvious outlier and the cryptocurrency that performed the best throughout the past seven days (at least amongst the top 20) is XRP. It absolutely dominated the markets during the week and is up a whopping 20% at times when most others struggle to trade in the green.
Its interesting to see if XRP will continue its rally or if a deeper correction is in the cards. However, the week also brought bad news from other fronts. Gary Gensler, the Chairman of the US Securities and Exchange Commission, is seeking more funds for his budget to continue cracking down on the industry, which he describes as the Wild West.
US POTUS Joe Biden also admitted that the banking crisis in the country might not be over yet, so its thrilling to see how the markets will shape up during these tumultuous and ever-volatile times.
Market Cap: $1,234T | 24H Vol: $54B | BTC Dominance: 44.6%
BTC: $28,463 (+0.1%) | ETH: $1,839 (+0.8%) | BNB: $319 (-3.6%)
MicroStrategy Repaid $205M Loan to Silvergate and Bought 6,500 More BTC.The worlds largest corporate holder of BTC has once again bought a considerable number of bitcoins after spending close to three months on the sidelines. Moreover, MicroStrategy also repaid a loan that was collateralized by BTC at a substantial discount.
Silicon Valley Bank Has a New Owner: Will Resume Work Today.The troubled financial institution Silicon Valley Bank has a new owner. Its offices opened earlier this week on March 27th. The bank is now owned by First Citizens BancShares.
Gary Gensler Wants More SEC Funding to Crack Down on Wild West Crypto.SEC Chairman Gary Gensler fully intends to continue his crackdown on the cryptocurrency industry. In fact, he is seeking additional funds for his budget to continue what he calls the Wild West crypto.
The US Banking Crisis Isnt Over Yet: Joe Biden.The President of the United States Joe Biden admitted that the banking crisis in the country is not over. Yet, he said that his administration has done what we needed to do executively while adding that he feels confident in the way things are settling out.
What are Binance and CZ Being Accused Of? A Closer Look at the CFTC Filing.The US Commodities and Futures Trading Commission filed a lawsuit against the worlds leading exchange Binance, and its CEO, Changpeng Zhao. We take a closer look at the complaint and point out some of the allegations.
SBF is Paying His Legal Fees Using Alamedas Money: Report.As if the revelations surrounding Sam Bankman-Fried and his now-defunct crypto exchange FTX werent enough, it also turns out that SBF is reportedly using Alameda money to fund his extensive court battle.
This week we have a chart analysis of Ethereum, Ripple, Cardano, Solana, and Litecoin click here for the complete price analysis.
PrimeXBT Special Offer: Use this link to register & enter CRYPTOPOTATO50 code to receive up to $7,000 on your deposits.
Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.
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Coinbase Stock Has Held Up Amid the Regulatory Crackdown on Crypto, Binance – Barron’s
Coinbase Global stock slipped amid declines across digital assets Tuesday, but the shares have still shown some resilience despite continued regulatory pressure on the crypto industry.
While Coinbase (ticker: COIN) stock often moves in step with digital asset prices, shares in the crypto broker had gained as much as 2% on Tuesday, initially holding up amid a broader downturn. The shares, however, fell 0.6% in afternoon trading as Bitcoin also shed 0.6%. The S&P 500 was down 0.5%, in comparison.
Fears gripped the crypto landscape after the Commodity Futures Trading Commission filed a suit against Binance on Monday. The commission alleged that the worlds largest crypto exchange violated rules requiring futures and other derivatives to be traded on regulated platforms. Binance said it was disappointed by the suit and that it would continue to collaborate with regulators in the U.S. and around the world.
Overall, Coinbase stocks resilience, and outperformance, in the face of these pressures is noteworthy. The shares are still up more than 75% so far this year, even though the stock dropped sharply last week after the company disclosed looming SEC charges. Bitcoin is lagging behind Coinbase shares, with the cryptocurrency gaining 64%, according to Dow Jones Market Data. The S&P 500 has only risen 3% in 2023.
But any gains in Coinbase stock arent as simple as investors bidding up the shares because of pressures on a rival.
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Coinbase and Binance are both crypto exchanges, but the former offers mostly straightforward buying and selling of digital assets, largely focusing on U.S. retail investors. Binance is based offshore, and is home to the worlds most liquid Bitcoin futures market, which is the largest market in all of crypto trading.
Pressures on Binance dont necessarily benefit Coinbase. In fact, CFTC scrutiny on Binance only underscores just how much U.S. regulators are cracking down on crypto companies at large. It was only last week that Coinbase said it was expecting charges from the Securities and Exchange Commission. Overall, the pattern of charges spreading to other companies isnt a positive for Coinbase.
The case against Binancewhich focuses on derivativesalso bodes ill for Coinbase, which has been pushing to diversify its business away from core crypto trading operations to include more subscription- and service-based revenue. Part of this diversification has included Coinbase dipping its toes into derivatives.
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However, investors are still upbeat about crypto, with Bitcoin and Coinbase stock alike rallying amid expectations that the Federal Reserve will be more accommodative on monetary policy. Traders are hoping that the era of high interest rates may soon end, which could mark a return to the looser financial conditions that sent Bitcoin on its last bull run in 2020.
And for Coinbase stock, regulatory headwinds generally seem to be falling to the waysideat least for now.
Write to Jack Denton at jack.denton@barrons.com
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Coinbase Stock Has Held Up Amid the Regulatory Crackdown on Crypto, Binance - Barron's
Litecoin (LTC) And Binance (BNB) Reel As Bulls Find Collateral … – NewsWatch
The bearish outlook of the market has prompted investors to leave projects like Litecoin (LTC) and Binance (BNB) behind, and choose Collateral Network (COLT) for assured profits.
The presale of Collateral Network has begun, and analysts believe that COLT will rise by at least 35x in the next six months.
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Although the overall market turmoil has hampered the growth run of Litecoin (LTC), the project has been able to record a major milestone. Litecoin (LTC) has been able to maintain its transaction consistency on Bitpay.
In February, Litecoin (LTC) controlled 23.71% of all transactions on BitPay. Notably, Litecoin (LTC) has registered the second-highest number of transactions in the last six months, after Bitcoin. However, the price movement of Litecoin (LTC) has not been encouraging for investors.
The price of Litecoin (LTC) has fallen by 24% in the last seven days. Moreover, Litecoin (LTC) has plummeted by 27% in the last 30 days. At present, Litecoin (LTC) is being traded at $68.99, which is 83% below its peak of $412.96.
Binance (BNB) has been the focus of US authorities for the last few weeks. Firstly, it was alleged that Binance (BNB) has misappropriated funds into crypto hedge funds just as was done by the FTX Exchange, which collapsed last year.
Secondly, a Wall Street Journal report has claimed that the user data of Binance USD, a corporate arm of Binance (BNB), is prone to get compromised by China-based entities. These events have marred the market performance of Binance (BNB).
The value of Binance (BNB) has fallen by 5% in the last seven days. Consequently, Binance (BNB) trades at $277.46, which is 60% below its all-time high of $690.93. In terms of market capitalization, Binance (BNB) is currently ranked 4th.
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Collateral Network (COLT) has stunned crypto experts with its huge value proposition and market viability.
Collateral Network (COLT) is built on the Ethereum blockchain, and its primary aim is to enable people to borrow capital against their real-world assets that range from real estate properties to fine wines and even luxury sportscars.
Conventional banks do not accept non-traditional assets as collateral, but, Collateral Network (COLT) provides borrowers with the flexibility to unlock liquidity from these assets in a decentralized peer-to-peer platform.
To facilitate crowdlending, Collateral Network (COLT) will mint fractional NFTs against these assets, backed 1:1, which will enable multiple lenders to fund the loan and earn a fixed rate of interest.
COLT, the platforms native token, grants holders various benefits on the ecosystem like staking, governance rights, discounts and even access to exclusive VIP groups.
It is no surprise that Collateral Networks (COLT) presale has become an instant hit in the market. The presale for COLT is available at $0.01. Its price is expected to surge to $0.35 before the end of the presale phase.
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Litecoin (LTC) And Binance (BNB) Reel As Bulls Find Collateral ... - NewsWatch
Analyzing exchange stablecoin holdings: Will Tether (USDT) lose relevance as Binance favors True USD (TUSD)? – FXStreet
Analysis of exchange stablecoin holdings reveals that Binance, a major player in the crypto ecosystem, is slowly shifting its stablecoin allegiances. Tether USD (USDT) remains the undisputed leader among stablecoins, but things could be about to change in the coming days.
Read more:The lawsuit against Binance highlights cryptocurrency infrastructure risks
Increasingly regulatory oversight has caused the cryptocurrency market to get extremely volatile. The stablecoin ecosystem has, in particular, witnessed the most drastic shift in paradigm after the United States Securities and Exchange Commission (SEC) targeted two major US stablecoin issuers - Paxos issuing Binance USD (BUSD) and Circle issuing USD Coin (USDC).
Since the SECs intervention, the stablecoins market capitalizations have plummeted drastically. Exchanges connected to the aforementioned stablecoins have had to make some changes to the way they operate.
According to data provider Nansen, the top three exchanges based on stablecoin balances include Binance, OKX and ByBit, holding $11.30 billion, $3.64 billion and $0.98 billion, respectively.
Clearly, Binance is the winner in terms of stablecoin holdings, and that is a given, considering the platforms popularity. All the exchanges seem to have USDT as their top stablecoin, again, this is obvious considering that it is the crowd-favorite despite the allegations and lawsuits.
As seen in the chart below, Binance, which currently has $2.45 billion in USDT tokens, is not the top holder of Tether but the Seychelles-based OKX exchange, which has $3.42 billion in its coffers.
Top exchanges tether (USDT) holdings
Looking at the second largest holdings, investors can note that Dai (DAI) is the crowd favorite. Binance is yet again the largest holder of DAI, followed by OKX and ByBit.
The third largest holding is Circles USDC due to its recent run-in with the SEC.
Exchanges stablecoin holdings breakdown
Binance CEO Changepeng CZ Zhao has been accused of many things, including the collapse of the US-based FTX exchange, which was a huge supporter of Tether. Although Binance has not openly supported USDT or its parent companies, it has had massive holdings of the stablecoin due to its popularity.
In September 2022, Binance held nearly $5 billion worth of USDT. But since then, it has reduced its exposure to the stablecoin, instead focussing its efforts instead on promoting BUSD with zero-fee trading.
As Binance extended this program to other trading pairs on July 8, 2022, its market share increased rapidly from 50% to 72%, according to Kaiko research analyst Riyad Carey. However, one of the worlds largest exchanges announced on March 22, 2023, that it would halt the zero-fee trading promotion since the promotion has not helped stem its loss in market share from a peak of 70% to 58%.
There are two reasons why Binances share of USDT has decreased
Heres a comparison of its stablecoin holdings between September 2022 and March 2023.
Binance stablecoin holdings % change
Starting mid-March 2023, Binance has started promoting the utilization of TUSD on its platform via new features like listings, swaps and loans.
The latest announcement from Binance notes the addition of multiple altcoin pairs and also encourages market makers via its zero maker fees policy.
It is highly unlikely that Tether will fall out of the stablecoin race after being at the helm for such a long time. Why? As Binance reduces its USDT holdings, OKX is stepping in to replace Binance. In fact, OKX is the largest centralized exchange holder of USDT.
Apart from the regulatory concern, there is no reason for Binance to completely reject the most popular base pair for cryptocurrency trading. The exchange could reduce the exposure to USDT while it builds up its TUSD coffers, but as mentioned earlier, it will not abandon Tether.
The only scenario in which that would occur is if the regulators nail Tether down in a lawsuit. This could prompt Binance and other exchanges to do the same.
Exchange stablecoin holdings breakdown
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Binance battles ‘FTX redux’ fears as regulators blow-torch the crypto giant – Markets Insider
Binance. NurPhoto / Contributor
Binance, the world's largest cryptocurrency exchange, is braving one of the roughest patches since it was founded by Changpeng Zhao and He Yi in 2017.
Fighting on multiple fronts at the same time, the digital-asset giant is facing a raft of US regulatory probes while also trying to shore up investor confidence damaged by the so-called crypto winter and a string of high-profile bankruptcies and scandals in the industry.
Following the shocking implosion of Sam-Bankman Fried's FTX late last year, concerns have risen whether Binance faces similar risks. Type 'Binance' into search analytics tools such as AnswerThePublic and they throw up a raft of queries including "will binance collapse like FTX" and "can binance be trusted", or even "binance is next".
The company is now facing legal and regulatory probes over potential breaches of anti-money-laundering rules, and questions about whether it properly registered some crypto derivatives. The grilling comes as regulators tighten their grip on the crypto industry following FTX's collapse.
John Reed Stark, a former attorney of the US Securities and Exchange Commission, tweeted earlier this month that Binance is "FTX redux and an epic bank run seems inevitable".
Crypto industry experts, however, don't seem that worried about Binance's future.
Alex Svanevik, CEO of crypto analytics firm Nansen, and Marcus Sotiriou, an analyst at digital asset brokerage GlobalBlock, expressed faith in the exchange despite the recent hiccups. Tom Wan, a research analyst at 21Shares, noted that Binance has proved resilient despite the regulatory crackdown and market turmoil.
"I do not think Binance will be the next FTX. They've been more transparent about customer deposits than FTX ever was," Nansen's Svanevik told Insider.
Both Svanevik and GlobalBlock's Sotiriou highlighted Binance's $65 billion in reserves as an indicator that the company is in good shape.
"I think Binance is here to stay and has amassed an empire which will be hard to disrupt," Sotiriou said. "Despite there being concerns around the transparency of Binance, such as no corporate governance, no headquarters, no CFO and no reputable auditor, there is enough evidence for me to predict that they are sufficiently capitalized, if not 100% solvent," he added.
The exchange has never invested or "otherwise deployed" customer funds without their consent, a Binance spokesperson told Insider in emailed comments.
"Binance holds all of its clients' assets in segregated accounts which are identified separately from any accounts used to hold assets belonging to Binance. It's important to note that our users are able to withdraw their funds whenever they wish - as has been demonstrated time and time again," the spokesperson added.
While the exchange may not face existential threats, it will likely remain under pressure from regulators and customers seeking greater transparency, Robert Le, a crypto analyst at data and software firm PitchBook, told Insider.
"We believe that post-FTX, the regulatory environment will be much less favorable for Binance and that they will face significant regulatory pressure across multiple jurisdictions. What this means is that the company will not only face substantial financial penalties but also the possibility of being forced to exit certain markets, restructure, or entirely segregate its various businesses," Le said.
Ed Moya, senior analyst at OANDA, holds a similar view.
"Binance is about to go through an intense gauntlet of regulatory inspection over their finances, operations, and compliance. The scrutiny will be relentless and potentially crippling for Binance. It appears that Binance will not have an easy path to operate in the US," he told Insider.
Binance is is boosting its compliance infrastructure by investing in related technology and human resources, according to the company's spokesperson.
Here are 5 instances where the crypto giant has come under fire from regulators or lawmakers.
A recent Wall Street Journal investigation revealed that Binance crafted a plan years ago to evade scrutiny from US watchdogs as authorities hinted their intention to clamp down on crypto businesses based overseas.
The strategy sought to create a US entity that was wholly independent of Binance's global operations so it set up Binance.US in 2019. Founded in 2017, Binance.com had largely operated in a free-floating way out of hubs in China and Japan putting it at a distance from regulatory checks.
But the plan proved to be flawed given the two platforms were more entwined than publicly disclosed, per the WSJ. They both mixed staff and finances, and even shared an entity that dealt with cryptocurrencies.
If US authorities decide the links meant the crypto exchange had control over the US platform, it could expose the company to enforcement action.
Binance is also fending off concerns about its handling of customer funds, following some reports that it used customer assets for its own purposes like FTX. The exchange transferred $1.8 billion in stablecoin collateral to hedge funds, leaving its investors exposed, according to Forbes, which reviewed on-chain data from August 17 to early December.
While the shift in funds may not be illegal, it could pose risk to Binance's investors. For example, Sam Bankman-Fried lost more than $8 billion in customer funds after allegedly transferring FTX deposits for operations at its sister trading firm Alameda.
Binance secretly moved $400 million from its US partner to a company managed by the crypto giant's boss Zhao, called Merit Peak, Reuters reported last month.
Binance claims that Merit Peak and Binance's US partner Binance.US operate independently from the exchange.
Binance US's former CEO Catherine Coley called the transfers "unexpected," per Reuters.
Binance's American affiliate has also come under pressure after an SEC official said the company is operating unregistered securities in the US, per CoinDesk.
The accusations have raised hurdles for a $1.3 billion deal between Binance.US and embattled crypto firm Voyager, in which the former planned to snap up the latter's assets. However, Voyager subsequently received permission to sell its assets to Binance in a snub to the SEC.
The SEC have clamped down on large crypto firms, including Gemini, Genesis and Kraken for operating assets that's not been rubber stamped by US regulators.
In another intervention by the SEC, crypto firm Paxos was ordered to stop minting Binance's dollar-pegged token BUSD because it was deemed an unregistered security.
That came after the regulator launched a lawsuit against Paxos for offering BUSD to its customers.
BUSD is the world's third largest stablecoin behind Tether and USD coin, with a market cap of more than $8.2 billion, according to CoinMarketCap.
"There is many unknown unknowns to jump to conclusion on Binance's; however, the coming months will be crucial to gain more transparency and clarity on Binance's overall financial health in light of the recent regulatory headwinds," 21Shares's Wan told Insider.
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Binance battles 'FTX redux' fears as regulators blow-torch the crypto giant - Markets Insider
Binance: Rebuilding Trust in Crypto – CryptoPotato
In 2022, the crypto industry experienced several damaging events that significantly weakened trust in the digital asset ecosystem. Investors and stakeholders have been left reeling from the fallout, which ranged from centralized exchange failures to regulatory crackdowns.
In the wake of these challenges, many industry leaders are grappling with rebuilding trust in crypto. One entity taking bold steps towards this goal is the leading crypto exchange Binance.
Binance believes that improving trust and the security of crypto assets is crucial to accelerating the mainstream adoption that the industry has long been working for. The exchange strives to lead in this aspect, setting a clear example that other CEXs can follow.
As part of these transparency efforts, Binance recently published a new policy paper titled Building Trust in the Crypto Ecosystem. This policy paper introduces guidelines that detail how industry players and users can work together to improve trust, security, and safety in the crypto space.
The policy paper is also accompanied by a dedicated Building Trust page, where everyone can see how Binance implements the new measures. The company has dedicated this page to everything related to trust and transparency. Below are some steps Binance has taken to foster trust and transparency.
The first major element of the policy paper is the safe handling of customer funds. Binance believes that centralized exchanges must adopt a new approach to the transparency of user funds to rebuild users trust.
Binance has adopted different proof of reserves (PoR) systems using two of the most secure and transparent cryptographic tools, Merkle Tree and Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (zk-SNARKs). This PoR system allows Binance users to verify their reserves while sensitive user information remains private.
Binance takes it further by disclosing its wallet addresses with each PoR snapshot. This increases users trust as they can view the reserves on the blockchain. To encourage the adoption of this PoR system, Binance has open-sourced the underlying code to allow other exchanges to use it and enhance their transparency.
Binance prioritizes the safety of users assets and other sensitive user information obtained during the Know Your Customer (KYC) process. Hence, the exchange employs some of the most robust encryption methods to keep these safe.
Binance stores the majority of user funds in cold storage facilities. It also uses advanced security measures, including multi-signature and threshold signature schemes (TSS), to ensure the safety of users funds.
The exchange also believes that even the most secure systems can fail. As such, it created an emergency insurance fund that protects its users in the event of a security breach. The Secure Asset Fund for Users (SAFU) currently has a balance of $1 billion.
Adequate transparency and disclosure are critical to fostering trust in the crypto industry. Trading platforms must enable users to verify that their assets are safely kept. Binance proposes using proof of reserves (PoR) disclosures built with innovative transparency solutions like zk-SNARKs and Merkel Tree a technology that increases the efficiency and security of blockchain by encoding data in a systematic order for easy verification.Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (zk-SNARKs) is a cryptographic proof that allows one to prove it possesses certain information without revealing the information. Since zk-SNARKs cannot be fabricated or manipulated, users can verify the safety of their assets on an exchange at any time.
Effective risk management is vital to retaining trust in an industry as volatile as crypto. Many companies collapsed last year due to unchecked leverage positions, over-collateralized loans, and inadequate protection funds.
Binance believes exchanges must ensure that loans are adequately collateralized and avoid taking on debt to fund expansion plans to prevent such incidents in the future. They must also ensure that tokens pass strict vetting processes before listing to protect users from investing in projects with low credibility and high risk while educating users on how the crypto market works. More importantly, exchanges must have user protection funds as a safety net to protect users in cases of security exploits and extreme bear markets.
Binance ensures all user assets are backed 1:1 and protected by the highest wallet security standards. The platform recently upgraded its third-party self-custody solution, Trust Wallet, to include additional security features that ensure the safekeeping of users assets.
The exchange also refrains from using customers funds for any other purpose without the consent of users.
Following the collapse of FTX, the then third-largest CEX in the market, Binances efforts to boost trust and transparency in the crypto industry took a major stride. The exchange published its first PoR disclosure, which relies on Merkle Tree, in November 2022.
In February 2023, Binance updated its PoR disclosure with zk-SNARKs, representing a significant improvement over the previous system. By disclosing its reserves, Binance allows its users to verify the safety of their assets at any point in time. A further update in March 2023 shows that Binances PoR disclosure has been updated to allow verification of user assets for a total of 24 tokens.
Before any token is listed on the Binance platform, the projects must complete stringent requirements to determine their eligibility. This allows users to only invest in thoroughly vetted projects.
Binance prioritizes the protection of users assets. Hence, it has a Secure Asset Fund for Users (SAFU) fund that protects users in severe cases. Binance currently has about $1 billion in its SAFU.
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