Richard Teng stated that he wants to maintain Binance as the “user-focused, user-first organisation” that contributed to its success in an interview with AFP while in Paris for a conference on the cryptocurrency industry.

However, he did add that Binance must also prioritise compliance and that more industry regulation would give participants in the market more clarity.

“We want to make sure that compliance is, also, a competitive advantage” for Binance, Richard Teng said.

He said that Binance had invested hundreds of millions of dollars in compliance and was closely collaborating with authorities, establishing a global board of directors with three independent directors at their request, among other things.

“Our board of directors will become our stewards guiding us in terms of direction to go, making sure that we adopt the best practices,” Richard Teng said.

Binance was founded in 2017 and quickly gained market share in the cryptocurrency trading space, making its CEO and founder Changpeng Zhao a billionaire.

When the cryptocurrency markets crashed and authorities started looking into the legitimacy of Binance’s operations, the company—which operates cryptocurrency exchanges and offers other services globally—suffered a serious setback.

The unstable sector saw a boom in 2021, and a variety of sophisticated products and celebrity endorsements helped it reach a valuation of more than USD 3 trillion in 2022.

But after a string of scandals, which included the main rival exchange of Binance collapsing in November 2022 and the indictment of multiple industry executives, investors withdrew their money from cryptocurrency, and public confidence evaporated.

Changpeng Zhao admitted to breaking US anti-money laundering regulations and agreed to resign from his post as part of a settlement struck with US authorities in November of last year. Binance consented to settle charges in February by paying USD 4.3 billion.

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After replacing Changpeng Zhao (CZ) as Binance’s CEO in November 2023, Richard Teng remarked, “The SEC’s approval of Bitcoin ETFs is likely to fuel the expansion of crypto competencies within financial institutions.”

The banking sector is adopting cryptocurrencies and blockchain technology, which supports this view.

Richard Teng said the mainstreaming of the crypto industry will increase demand for blockchain and cryptocurrency traders and regulatory compliance expertise.

Binance believes this is part of a larger trend where traditional financial institutions recognise digital assets and blockchain technology. He also expects the business to flourish and includes crypto-related roles in these organisations.

“Binance believes that this development is a testament to regulatory progress in this field and adds credibility to the industry, making it more attractive to institutional and retail investors,” he said.

He claimed Bitcoin ETFs will make access easier, attract more investors, and boost liquidity, as gold ETFs did in 2004, with favourable price action.

He said, “This holds especially true in light of the coinciding Bitcoin Halving event this year.”

Bitcoin halves miners’ coin earnings.

Richard Teng also noted that the clearance could spur financial institutions and investment businesses to explore a wider range of crypto products beyond crypto ETFs.

He said the move boosts market trust and that Binance is looking forward to milestones like the SEC’s May decision on Ether (ETH) ETFs and traditional finance’s interest in digital assets.

After the SEC approved spot Bitcoin ETFs in January 2024, experts told Zawya that conventional financial institutions had been expanding crypto and blockchain operations and expected results in 2024.

AsiaNext, an institution-only digital asset exchange in Singapore, launched crypto derivatives trading recently, calling it a “crucial development” for institutional investors.

Meanwhile, in its latest market research report, American financial services biggie JP Morgan sees significant funds from other crypto products to be poured into the Bitcoin ETFs.

JP Morgan, however, noted a muted reaction from the American stock markets on the United States Securities and Exchange Commission approving the Bitcoin ETFs, as the focus now shifts to how much capital these new exchange-traded funds will pull in.

“We are sceptical of the optimism shared by many market participants at the moment that a lot of fresh capital will enter the crypto space as a result of the spot bitcoin ETF approval,” the report noted.

Still, JPMorgan sees a significant rotation from existing crypto products into the newly created Bitcoin ETFs. So in case no new capital enters the cryptocurrency market, these ETFs may still attract inflows of up to USD 36 billion.

JPMorgan also predicts that about USD 3 billion may exit the Grayscale Bitcoin Trust (GBTC) and migrate to the new spot ETFs as a result of investors taking profit after buying discounted GBTC shares in the secondary market in 2023. The financial services giant also sees up to USD 20 billion from retail investors migrating from digital wallets held at crypto exchanges to the new ETFs.

Grayscale’s high fees could also trigger outflows, and unless it lowers its rates toward the level set by Blackrock (BLK) and other providers, “a lot more capital, perhaps an additional USD 5 billion-10 billion could exit GBTC relatively quickly to migrate towards cheaper spot bitcoin ETFs,” the bank added.

Institutional investors that hold their crypto in fund format could shift from futures-based ETFs and GBTC to cheaper spot ETFs, especially if GBTC is slow to cut its fees, JPMorgan concluded.

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The move, as per Reuters, comes as a response to Binance’s non-compliance with local corporate and financial regulations in the Philippines.

The Southeast Asian country’s decision was influenced by the revelation that Binance was operating in the Philippines without being a registered corporation.

“Moreover, the exchange lacked the necessary licence and authority to sell or offer securities in the country. This lack of compliance has prompted the SEC to take stringent measures to protect Filipino investors and maintain the integrity of the local financial market,” Reuters reported further.

The Binance ban in the Philippines will be implemented by February 2024, as the grace period given by the SEC now aims to provide Filipino users with ample time to withdraw their investments from the crypto exchange.

Stepping up against the crypto exchange further, the Filipino SEC has reached out to tech giants like Google and Meta, while requesting them to prohibit online advertisements promoting Binance in the Philippines. Also, individuals selling through or persuading others to invest in Binance might face criminal charges in the Southeast Asian nation.

Binance CEO Changpeng Zhao stepped down from his position in November 2023 after pleading guilty to charges related to the failure to maintain an effective anti-money laundering program at the crypto exchange, thereby raising concerns about the exchange’s adherence to global financial regulations and its impact on investors worldwide.

Changpeng Zhao has also resigned as a chairman of the Binance.US board of directors. He has transferred his voting rights through a proxy. Zhao, who has pleaded guilty to federal charges imposed by the United States Department of Justice (DoJ), will have to pay a USD 4.3 billion fine.

Binance.US, while talking about Changpeng Zhao’s exit, said, “Binance.US continues to be led by Norman Reed and our existing, experienced management team. We are well capitalised to continue to build and grow our platform and to do so with renewed clarity and momentum while maintaining the same customer-first commitment.”

The Joe Biden government is now investigating whether Binance.US had a backdoor to control customer assets like the bankrupt fraud-ridden crypto exchange FTX.

Binance will also cease support for the BUSD stablecoin by December 15, 2023. The crypto exchange has now advised its users to withdraw/convert any BUSD holdings into alternative cryptocurrencies. It also pitched the conversion to its own FDUSD stablecoin as an option at a 1:1 ratio with no trading fees.

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The agreement, disclosed in the latest court papers, still requires the federal judge’s approval overseeing the litigation. To ensure that US customer assets do not go offshore, the agreement allows only Binance.US employees to have access to these assets.

The SEC on June 5, 2023, sued Binance, along with its CEO and founder, Changpeng Zhao, and Binance.US, alleging that the crypto powerhouse artificially inflated its trading volumes, diverted customer funds, failed to restrict US customers from its platform, and misled investors about its market surveillance controls.

The suit and one filed by the SEC the following day against major US exchange Coinbase represented a dramatic escalation of a crackdown on the industry by the regulators.

Under the agreement, which does not resolve the SEC lawsuit, Binance.US will take steps to make sure that no Binance Holdings officials have access to private keys for its various wallets, hardware wallets, or root access to Binance.US’s Amazon Web Services tools, the court filings showed.

The SEC said in a statement that the emergency relief order secured for Binance.US customers would protect their assets and ensure they can continue to withdraw them.

“Given that, Changpeng Zhao and Binance have control of the platforms’ customers’ assets and have been able to commingle customer assets or divert customer assets as they please, these prohibitions are essential to protecting investor assets,” Gurbir Grewal, director of the SEC’s enforcement division, said in the statement.

A Binance spokesperson remarked, “Although we maintain that the SEC’s request for emergency relief was entirely unwarranted, we are pleased that the disagreement over this request was resolved on mutually acceptable terms. User funds have always been safe and secure on all Binance-affiliated platforms.”

Under other provisions in the proposed agreement, Binance.US will create new crypto wallets to which the global exchange’s employees have no access, provide additional information to the SEC, and agree to an expedited discovery schedule.

The US affiliate of Binance recently halted dollar deposits and gave customers a deadline of June 13 to withdraw their dollar funds after the SEC asked a court to freeze its assets.

Meanwhile, Bitcoin experienced a ‘flash-pump’ to USD 138,000 on Binance.US during the early trading hours of June 21, according to data from the crypto exchange.

The Bitcoin price spike lasted only seconds before returning to its normal level and was specific to the exchange’s BTC/USDT trading pair, while other assets continued trading at their usual levels, as per a report from the CryptoSlate.

However, the crypto industry is witnessing another round of financial bloodbath, amid SEC’s fresh crackdown upon the industry. Blockchain analytical firm Kaiko reported that Binance’s market depth fell by almost 80% as of June 12, with its market depth for 17 tokens dropping to USD 7 million from the USD 34 million recorded on June 4.

Binance has been facing troubles of late. The exchange’s banking partners decided to halt their dollar payment channels. In May 2023, Bitcoin reportedly traded at nearly a 3% discount on Binance.US compared to other rival exchanges.

Its director of Brazilian operations, Guilherme Haddad, is now facing the prospect of being summoned before the Latin American country’s parliament over an investigation into the alleged pyramid schemes being run in the country.

In France, the crypto exchange is now facing an anti-money laundering investigation, while it has exited the Netherlands after failing to obtain a trading license from the Dutch central bank.

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“At the time of this tweet, there were 5900 users on @Binance. We currently have 7400+ people. By the end of the year, we aim for around 8000. Hiring keeps going,” CEO Changpeng Zhao tweeted.

Changpeng Zhao also referred to an earlier tweet that read, “It was not easy saying no to Super Bowl ads, stadium naming rights, and large sponsor dealt a few months ago, but we did.”

There were 2,000 open vacancies in the employment posting.

After Binance pulled out of the FTX bailout deal, the news affected the crypto market badly, with most of the digital currencies, including bitcoin depreciating significantly.

However, the company has now created a USD 2 billion industry recovery fund, which will be used to buy distressed crypto assets.

Binance’s plan of going for another round of hiring comes at a time when the crypto sector has been facing the heat of the FTX controversy, which resulted in some one million creditors losing billions of dollars from the market.

Batting for an anticipated recovery for the sector, Changpeng Zhao said, “it was a terrible year, and a lot has transpired in the last two months. As a result, the industry is healthier now. Just because FTX occurred does not imply that all businesses are bad.”

Binance has also released a new website explaining its proof-of-reserves system. The company currently has a reserve ratio of 101%. It means that it has enough bitcoins to cover all users’ balances.

Binance also shared wallet addresses containing billions of dollars worth of crypto assets. It also claimed to hold a lot of assets, apart from the ability of processing “a ton of withdrawals”.

Changpeng Zhao also remarked that regulation rather than opposition to the crypto sector should be a better option for governments.

The post Binance CEO Changpeng Zhao comes up with good news appeared first on International Finance.

Sam Bankman-Fried resigned as the FTX Group CEO, and issued an apology on Twitter. The whole saga not only has started a liquidity crisis, but the customers are also losing confidence in the crypto market in general. FTX and Alameda were established players when it came to crypto trading, lending, and bailouts of other crisis-hit businesses. It also got investment from prominent venture-capital firms, pension and hedge funds, with some of them investing in the crisis-hit crypto powerhouse at a valuation of USD 32 billion in 2022 alone.

Over USD 125 billion in market cap of Bitcoin and other tokens have been wiped out. FTX US has frozen its customer accounts and will halt trading soon. FTX’s venture-capital investors, including giants like Sequoia Capital, Tiger Global Management, and the Ontario Teachers’ Pension Plan, are all staring at a crisis.

More than 100,000 legal complaints have been filed against the company and the tally will grow more. FTX has been asked to provide at least a list of the company’s 50 biggest creditors.

Who Is Sam Bankman-Fried?
In October 2022, the 30-year-old’s net worth was around USD 10.5 billion. Now, it has plunged to USD 991.5 million. He saw a huge 94% drop in his fortunes, the highest in the history of the Bloomberg Billionaires Index. And on November 11, SBF too has no material wealth against his name.

During the 2020 US Presidential Elections, he emerged as the second-largest individual financial backer to Joe Biden’s campaign, donating USD 5.2 million. He also donated USD 40 million to candidates during the midterm polls.

Born in a Jewish academics’ family in 1992, Sam Bankman-Fried is the son of Barbara Fried and Joseph Bankman. Both are professors at Stanford Law School. After completing his schooling at California’s Crystal Springs Uplands School, SBF attended the Massachusetts Institute of Technology and completed his degree in physics and a minor in mathematics in 2014.

Sam Bankman-Fried’s tryst with financial markets came in 2013, while working at the trading firm Jane Street Capital. He first interned from there and came back into the same company after graduating.

In 2017, he left Jane Street and after working as the director of development at the Centre for Effective Altruism, he formed Alameda Research in the same year.

Till 2021, he held 90% of Alameda’s stakes. In 2018, he hit the headlines after organizing an arbitrage trade, where his company used to earn USD 25 million daily, using the higher bitcoin prices in Japan to its advantage.

He then moved to Hong Kong and formed FTX in 2019. In 2022, Sam Bankman-Fried’s other company Emergent Fidelity Technologies Ltd. bought 7.6% of Robinhood Markets’ stock.

During the Twitter vs Elon Musk lawsuit, Sam Bankman-Fried offered the Tesla CEO monetary help in buying the social media platform. SBF also invested over USD 500 million into other venture capital firms, including USD 200 million into Sequoia Capital.

Crypto Industry Lobbying
In 2022, Sam Bankman-Fried financially supported a policy action initiative called “Protect Our Future”, launched by Democrats with initial funding of USD 10 million. He donated some USD 39.8 million to democrats during 2021-22 and emerged second-highest donor after another prominent businessman George Soros. In 2022 alone, he contributed some USD 40 million to the party.

In 2022, FTX circulated suggestions to US politicians, while SBF publicly said that the Commodity Futures Trading Commission should take up a regulatory role in the crypto industry.

He even pitched for crypto regulations through the proposed Digital Commodities Consumer Protection Act (DCCPA) and he lobbied in Congress for that. Some reports suggested that the whole move was launched to favor FTX and give it an undue advantage over its rivals.

On August 15, 2022, Sam Bankman-Fried’s political contributions went to both democrats (USD 35,872,000) and conservatives (USD 105,000).

How FTX Fiasco Unfolded
As per media reports, FTX used customer assets (without the formers’ knowledge) for trading at Alameda. While the United States Securities and Exchanges Commission doesn’t allow such practices in conventional brokerages and exchanges, a lack of regulatory body in the crypto sector allowed FTX to carry on such unethical practices.

As media organization CoinDesk reported about Alameda’s balance sheet containing a token called FTT, the whole row started. In fact, Changpeng Zhao, the CEO of Binance, the world’s largest crypto exchange, said that he would unload more than USD 500 million worth of FTT that his firm had acquired.

Immediately, FTX witnessed some USD 5 billion worth of customer capital withdrawals and the company faced a USD 8 billion shortfall. While rival Binance initially signed a letter of intent to acquire FTX, it backed out later. The whole saga lasted from November 2 to 11.

When Changpeng Zhao came to know about the media reports on FTT tokens, he tweeted, “due to recent revelations that have come to light, Binance would liquidate its holding of FTT tokens.”

Binance invested as a shareholder in FTX in 2019. However, it quit the arrangement in 2021 and got USD 2.1 billion in Binance’s own stablecoin (BUSD) and in FTT tokens as part of the exit deal.

Meanwhile, Sam Bankman-Fried took potshots at Changpeng Zhao in a series of tweets. However, both later said that a deal can be reached to rescue FTX. However, on November 9, Binance CEO backed out of the deal, sending the crypto market into a crisis.

On November 11, FTX filed for bankruptcy in the US. CoinDesk report claimed that Alameda Research held billions of dollars worth of FTT, which in turn, were getting used as collateral in loans (borrower’s pledge of specific property to a lender). A fall in FTT’s value means FTX’s crypto businesses getting damaged. However, it was later revealed that FTT had no value beyond FTX’s commitment to buy tokens at USD 22.

Both FTX and Binance process a huge chunk of global crypto trades in form of “international exchanges”. Both these follow the US regulations as well, while operating in the American markets.

FTX customers have been on a withdrawing spree. Reuters accessed a message from Sam Bankman-Fried to his staff, where the businessman said that some USD 6 billion worth of crypto tokens have been taken out from FTX in just 72 hours.

What’s Next For FTX?
“Had I been a bit more concentrated on what I was doing, I would have been able to be more thorough,” Sam Bankman-Fried told the New York Times in a recent interview, while remarking on the FTX crisis.

However, the road ahead for the company looks challenging. Despite the customers withdrawing USD 6 billion worth of crypto tokens last week, the exodus will continue and most importantly, the company needs to find capitals worth millions of dollars to meet its customers’ withdrawal demands.

As per Bloomberg reports, FTX needs USD 4 billion to stay afloat and its funding gap has risen to USD 8 billion. The digital assets of the crypto exchange’s Bahamas unit have been seized by the country’s authorities. Celebrities like Larry David and Tom Brady have been named in the lawsuit against the company.

FTX-backed BlockFi’s management is now on the verge of collapsing, while another crypto firm SALT Blockchain is too facing the heat for its ties with Sam Bankman-Fried and his aides.

The post The rise & fall of FTX founder Sam Bankman-Fried appeared first on International Finance.

In a blog post, WazirX said, “After an in-depth internal investigation, WazirX noticed that most of the users whose information was sought by the Enforcement Directorate were already identified as suspicious by WazirX internally and were blocked in 2020-2021.”

The cryptocurrency trading platform suffered a severe setback as a result of the Enforcement Directorate inquiry, and US-based cryptocurrency exchange Binance practically disowned WazirX as an outcome.

WazirX was believed to have been acquired earlier in 2019, but Binance CEO Changpeng Zhao claimed the company did not own WazirX a few hours after the Enforcement Directorate seized accounts for the company.

This ultimately resulted in a Twitter argument between Changpeng Zhao and Nischal Shetty, the other co-founder of WazirX, on August 6 and 7.

Additionally, Binance shut off the channel for off-chain fund transfers between WazirX and Binance. Fund transfers that take place off the blockchain are known as off-chain transactions. Off-chain transactions have gained a lot of traction because they have no or little gas fee.

“The Enforcement Directorate (ED) has been conducting investigations of 16 fintech companies and instant loan apps. Some out of them have happened to use the WazirX platform,” the cryptocurrency trading platform added.

“WazirX has been cooperating with the investigators by providing them with all the necessary details, information, and documents of the alleged accused companies who used the WazirX platform,” WazirX said.

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