Binance and USA breaking up?
On February 17th, Bloomberg News published a report that claimed Binance would be cutting ties with U.S. business partners, and delisting all U.S.-based cryptocurrencies, as a result of the increased regulatory pressure put on the company.
The report claims that the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), Justice Department, and the Internal Revenue Service (IRS) all have open investigations into Binance.
This pressure has caused many issues for Binance, as most recently their partnership with Paxos was terminated, and the Binance USD (BUSD) stablecoin will no longer be issued, after the SEC claimed that BUSD is an unregistered security.
The report also brings up moves by Binance that seem to support the claims, as earlier this month Binance suspended all withdrawals and deposits of US dollars.
“Like every other blockchain company, we are conducting a careful cost-benefit analysis and will pivot our business as necessary to protect our global user base.”
– Binance Spokesperson
Another issue looming over Binance’s head is the Reuters report that claims their sister company, Binance.US, transferred $400 million to a trading firm managed by their CEO, Changpeng “CZ” Zhao; which would be a clear conflict of interests and reminds some of FTX and Alameda Research.
Binance.US responded to these claims on Twitter with a lengthy post, that does not quite answer all the questions asked of them.
The link between their sister company’s CEO, Changpeng “CZ” Zhao, and the trading firm is not explained, nor even acknowledged.
However, at the very least Binance.US gave it’s customers some peace of mind, by coming out and explicitly stating that “Binance.US has never -and will never — trade nor lend out customer funds”.
Changpeng “CZ” Zhao, the CEO and co-founder of Binance, took to Twitter to shoot down the claim of delisting U.S.-based crypto made by Bloomberg in their report, by simply Tweeting the message: “False”.
In the replies to his Tweet, CZ was cheekily asked what a US-based token even is, and he responded by asserting “Blockchain has no borders”.
The term “U.S.-based” crypto or token is definitely a new one, and I would guess it is part of the new regulatory push in the United States to frame U.S.-based and not U.S.-based cryptocurrencies as different and one being better than the other.
However, after the original reporting was corrected to show that U.S.-based cryptocurrencies would not be delisted, CZ seems to confirm that Binance has in fact pulled back their investments in U.S. business partners, and must “seek permission first”.
The “seek permission first” line could possibly alluding to Binance checking with the SEC, and other regulatory agencies in the United States, before engaging with U.S. companies.
I am not entirely sure what to make of all this news, reports, and comments by CZ, but I am sure more will be coming out in the future.
I am eager to see what happens and will be sure to write about it!
What are your thoughts on this news?
Do you think Binance will be leaving the United States for good?
Or is this being blown out of proportion?
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