With Execs Leaving and Market Share Declining, Can Binance Survive? - Ep. 544
Sep 15, 2023
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In this discussion, Steven Ehrlich, director of research at Forbes Crypto, and Michael Del Castillo, a veteran crypto reporter, dive into the future of Binance amid growing challenges. They explore the fallout from FTX’s collapse and how it's affecting Binance's market dominance and customer trust. Steven shares insights on Binance.US's precarious situation and the implications of recent SEC and CFTC lawsuits. The conversation also touches on whether Binance could face a fate similar to FTX, emphasizing the need for cautious optimism in the crypto industry.
Binance's market dominance has been challenged by customer outflows, winding down of stablecoin BUSD, and SEC/CFTC lawsuits.
Binance.US is in a precarious position and needs to regain market volume to increase revenue.
The SEC's partial loss in the Ripple case does not necessarily make Binance feel stronger.
Consumers losing trust in Binance can have serious consequences for the exchange.
The speculation that Binance is the next FTX holds some merit.
Deep dives
FTX bankruptcy and legal battles
FTX, the collapsed crypto exchange, has received approval to sell $3.4 billion in crypto assets to repay creditors. It is also suing layer zero labs for alleged fraudulent transfers. FTX CEO Sam Bankman-Fried is facing an upcoming trial and his defense has submitted probing questions for potential jurors. Lawsuits, freezing of assets, and legal battles continue to plague the exchange.
Stoner Cats NFT project faces SEC charges
The SEC has charged the Stoner Cats NFT project with offering unregistered securities. The project raised $8 million through the sale of 10,000 NFTs. Stoner Cats 2 LLC, the project's entity, consented to a cease and desist order and agreed to pay a $1 million penalty. The allegations highlight the SEC's scrutiny of celebrity-backed cryptocurrency ventures.
Genesis Global and Gemini's proposed solution for affected users
Genesis Global, the parent company of Genesis Global, is proposing a plan to help users of the Gemini Earn program recover their assets. The plan includes selling $670 million worth of grayscale Bitcoin trust shares to compensate affected users. This comes as Genesis and Gemini face legal disputes and regulatory scrutiny from the SEC.
Legal battles and setbacks for Celsius Network
Alex Mashinsky, the former CEO of Celsius Network, is fighting back against a lawsuit filed by the Federal Trade Commission. He denies any wrongdoing. Meanwhile, Celsius's former chief revenue officer, Roni Cohen-Pavon, has pled guilty to several criminal offenses related to securities fraud and market manipulation. He is facing potential jail time.
CoinX targeted by a North Korean hacker group
Cryptocurrency exchange CoinX has been attacked by North Korean hacker group Lazarus. It is believed that $55 million worth of crypto assets were stolen from the exchange's hot wallets. CoinX has vowed to compensate affected users and is actively investigating the incident.
Pexos mistakenly pays high transaction fee
Crypto service provider Pexos mistakenly paid 19.89 Bitcoin, approximately $500,000, in transaction fees for a transfer of just 0.008 Bitcoin. Pexos is working to recover the funds from F2Pool, the mining pool that processed the transaction. User assets are reportedly safe, and Pexos has pledged to fully compensate affected parties.
Malady NFT collection faces new setbacks
The Malady NFT collection, known for its anime picture profiles, is facing another setback. Social media accounts associated with the project, including Malady Maker and Remillian Air, were seized by an attacker. The attack resulted in a diversion of approximately $1 million in fees from the Remilia Corporation. The project's creator has vowed to pursue those responsible.
Founder of Thodex sentenced to over 11,000 years in prison
The founder of Turkish crypto exchange Thodex has been sentenced to over 11,000 years in prison. The exchange collapsed in 2021, and the founder was arrested in Albania. The sentencing includes a $5 million fine. The collapse of Thodex highlights ongoing legal and regulatory challenges in the crypto industry.
Weekly recap conclusion
The crypto industry continues to face legal battles, regulatory scrutiny, and security breaches. From the bankruptcy of FTX to the SEC charges against Stoner Cats, these events highlight the need for increased regulatory compliance and security measures in the cryptocurrency space.
In the wake of FTX’s collapse, Binance – already the biggest exchange in the world by a large margin – has continued to grow. But a series of challenges, including billions of dollars worth of customer outflows, the winding down of its stablecoin BUSD and the SEC and CFTC lawsuits related to its U.S. operations have challenged its market dominance. Steven Ehrlich, director of research at Forbes Crypto, joins the show to discuss how Binance has been dealing with a deluge of bad news and how it plans to forge a path forward.
