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HomeNewsBusinessBinance Attempts to Replace FTX’s Crypto Regulation Initiatives

Binance Attempts to Replace FTX’s Crypto Regulation Initiatives

Changpeng Zhao, the CEO of Binance, has often emphasised that his exchange and firm are financially sound, but detractors point out that it is difficult to gain a clear picture of their finances because of the company’s excessive secrecy.

To assist with “discussions with policymakers and regulators” to create legislation for the blockchain business, Binance stated on Tuesday that it was partnering with the Chamber of Digital Commerce, a trade organisation for the cryptocurrency industry.

Although Binance and its executives have frequently stated that they won’t emulate Sam Bankman-fake Fried’s crypto business, it is clear that they are copying his strategies in every way.

According to Binance’s VP of Public Affairs Joanne Kubba, “Such effort is crucial to our shared aim of fostering the sustained development of sound rules for cryptocurrency and blockchain, which ultimately assures protections for consumers.”

The Chamber also operates a political action committee, which as of November 28 had spent just over $15,500. Although it is a pitiful sum in comparison to what Bankman-Fried was offering, it represents a step toward even more cryptocurrency money reaching politicians.

If you’re beginning to have a sense of déjà vu, that’s because FTX was in a position to be one of the main voices for blockchain regulation until it crumbled, declared bankruptcy, and had various fraud investigations opened against its executives. Sam Bankman-Fried, the founder and CEO of FTX, who will shortly return to the United States to answer to federal allegations of fraud and breaking campaign financing regulations, had generously given to members of both parties. Before the roof collapsed on his head, Bankman-Fried was advocating for legislation that would give the Commodity Futures Trading Commission more regulatory authority. This legislation was being pushed by Senators Debbie Stabenow and John Boozman.

Zhao, also known as CZ, and Binance have both stated that some form of crypto regulation is necessary. However, Zhao’s recent readiness to participate directly in regulatory procedures coincides with other news that gives the impression that Binance wants to replace the ailing FTX. The defunct cryptocurrency corporation Voyager stated on Monday that it will be selling its last remaining assets—old client accounts—worth little over $1 billion to Binance US, the business’s American division. Early this year, Voyager filed for bankruptcy, and CEO of Binance.US Brian Shroder stated, “Our goal is simple: restore people their money on the shortest timeframe.”

Only $20 million of the buyout, according to Forbes, would go to the bankruptcy estate. Similar arrangements were struck between FTX’s U.S. office and Voyager earlier this year, when the latter exchange offered to exchange $50 million for $1.422 billion in cryptocurrencies.

The total sum that Binance is prepared to pay is crucial, particularly in light of the fact that when CNBC asked Binance CEO Changpeng Zhao if his exchange could take a $2.1 billion hit if those handling the FTX bankruptcy try to recoup an early investment, Zhao merely reiterated “we are financially strong.” After receiving criticism for how little these reports actually revealed about various crypto businesses’ financial health, the organisation that had carried out a selective “proof-of-reserves” audit for Binance withdrew from conducting any audits focused on the cryptocurrency industry. Crypto bros Zhao retweeted have attempted to discredit Binance’s reserves by saying that “comparing Binance to FTX is ludicrous.” The issue is that, unlike rival Coinbase, Binance has resisted doing a thorough audit of its business, which would examine other liabilities rather than only determine whether Binance has a fully stocked piggy bank. Zhao’s responses haven’t done much to allay concerns about the business, according to op-eds that have appeared in outlets like CoinDesk.

A lengthy Reuters piece published on Monday mentioned the company’s secrecy. Since Binance does not have an official address, it seldom, if ever, discloses financial data like its obligations, costs, and income that other publicly traded firms do on a regular basis. Despite the fact that Binance is a privately held firm, a Reuters report stated that it examined records in the 14 jurisdictions where the company claims to be registered and found “scant information” indicating how the company is faring. Zhao himself asserted that the company has no venture capital investments and owes “nobody any money,” and that the majority of its income come from transaction fees. But it doesn’t mean that FTX’s purported “transparency” prevented the exchange from sending billions of dollars in customer cryptocurrency to the hedge fund Alameda Research, which gave rise to all of these federal allegations. However, Binance is currently the subject of a government investigation into possible money laundering and sanctions violations. As a result, there may be many similarities between the two conversations.

News Summary:

  • Binance Attempts to Replace FTX’s Crypto Regulation Initiatives
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