The notch is visible on the Bitcoin chart. It was Tuesday afternoon and the news broke: Binance, the largest cryptocurrency platform in the world, through which about six out of ten euros invested in cash in this business are processed, has reached an agreement with the Ministry of Justice, the Ministry of Finance and the Ministry of Finance The US Futures Market Commission has to pay a record fine of 4,368 million dollars (around 4,000 million euros) for violations of laws against money laundering and the regulation of securities markets. Additionally, its CEO, Chinese-Canadian Changpeng Zhao, was a charismatic boss who everyone in the crypto community listened closely to – 8.7 million followers on X, where he goes by the initials by which he is best known, CZ – identified forced to resign after pleading guilty to failing to maintain an effective anti-money laundering program.
Next, most digital currency investors checked the market situation to see if their money was affected. How was Bitcoin’s decision made? The precedent of the FTX platform bankruptcy a year ago caused significant price damage, but in this case the consequences seemed to be very small: the operations of Binance users were not affected, and no one lost their money. Only an acceptable sanction considering that Binance’s derivatives business was earning more than $1 billion per month in May 2021. And a change at the top, now in the hands of Richard Teng, a Singapore-born financial veteran with currency and regulatory experience who joined the company just two years ago.
The hit to the Bitcoin price was therefore small and painless. The price had already recovered before the news. And Binance continues to operate as if nothing had happened. Only his former boss Changpeng Zhao, who not long ago rose to the honorary positions of the Forbes list ahead of the likes of Mark Zuckerberg, saw his routine change radically without fully processing his role change and the end of a busy schedule full of business trips. “I’m “enjoying” all the free time I suddenly have now,” he explained after he got off to a good start in his company.
Bitcoin, on the other hand, has recorded a gain of 127% so far this year. It is worth almost $38,000, which is still a long way from the almost $69,000 it reached at its peak in November 2021, but it is among the best-performing assets in 2023.
In short, the impact of the Binance case does not appear to be significant for the sector. Analysts like Manuel Villegas from Swiss asset manager Julius Baer believe this. “The regulatory hurdles arising from these developments are likely to increase, but overall we do not believe they will impede the long-term development of this asset class.”
Andrew Carrier, CEO of blockchain company Quant, believes the days of impunity are over. “This is just the latest episode in the welcome decline of the unregulated cryptocurrency market. Cases like those involving FTX and Binance symbolize the personality decline of the crypto bro, as these high-profile personalities officially go from cowboys to outright criminals. The good news is that much of the world already has regulations in place to combat fraud and incompetence in decentralized finance and blockchain technology. “In the future they will mature and become professional until they are no longer culturally recognizable,” he defends.
The impact on aspects such as reputation also remains to be seen, which has so far led other competitors to distance themselves from their poor practices. For example, Binance’s US business was dependent on a limited liability company in the Cayman Islands.
Leif Ferreira, CEO of Spanish cryptocurrency platform Bit2Me, has long criticized the lack of transparency with which Binance manages its accounts. “At Bit2Me, we have been committed from the very beginning to a long-term strategy based on regulatory compliance, transparency and consumer protection. “We are based in Spain, far from tax havens, in a region (of the European Union) with very clear consumer-friendly jurisprudence, and we have been working to address the challenges that the new MiCA law will bring” , he emphasizes.
Still, the entire industry would have been affected if the sanctions against Binance had been harsher, so the end of the process comes as some relief. As Bloomberg summarized, what ultimately can be seen is that it is a defeat for CZ, deprived of its power in the company, and a victory for the crypto market, freed for now from rumblings and uncertainty about its fate . one of its main characters.
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