Imagining A Cryptocurrency Landscape Without Binance

Fresh off his legal case against Coinbase
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, the Securities and Exchange Commission went after Binance with a vengeance. of the company the lawyers said it would stop trading in their US subsidiary and force lenders to stop financing them, which hasn't really happened at the moment. However, the situation seems quite dire. The SEC filed 13 charges against Binance, founded in Shanghai in 2017 and now based in the Cayman Islands with servers around the world.

At the center of the SEC's fight is the charge that the forbes billionaire and Binance founder Changpeng Zhao (aka "CZ") has subverted the company's own compliance rules by secretly allowing US clients to trade on the Binance.com platform. Unlike Coinbase, Binance is not open to US retail investors here. Domestic users should access Binance.US, which according to the SEC is really Binance, minus the dot-US extension.

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The SEC alleges that CZ and Binance said that Binance.US was an independent trading platform for US investors, but the SEC says that Binance is the actual operator.

The Commodity Futures and Trading Commission had already sued CZ and Binance in March. This is like a woodpecker slowly pecking at a tree branch. Will fall? Nobody knows. But the consensus is that cryptocurrencies survive even if Binance's platforms are banned in the United States.

“This seems to me like nothing more than market manipulation, like China’s cryptocurrency ban in previous market cycles,” says Boris Povar, CEO of EYWA, a cross-chain solution that links blockchains outside of Antalya, Turkey. “Even if Binance.US shuts down, it won't shut down Binance. This will speed up Binance's transition to a fully decentralized structure, which it has been doing for a long time, since the establishment of Binance DEX on BNB.
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Beacon Chain and launch of BNB Smart Chain, in addition to investing in infrastructure projects such as Trust Wallet, Injective
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Protocol and others,” he says in defense of Binance. “That is the future pillar of a decentralized Binance. It will gradually be reborn as a decentralized exchange (DEX) and I think it will become stronger. Any closure of the US market for Binance will lead them to develop other markets in Asia and even France.” Povar says he uses Binance and has had no issues with the platform abroad since the legal case was filed this month.

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Binance Out in Belgium, Austria and more

Binance is taking a hit, overall.

It boasts of having a trading volume as high as $65 billion per day average. To put that in perspective, the Hong Kong Stock Exchange had $21.8 billion in daily transaction volume recorded on May 31, one of its most important trading days of the year.

Trading is winding down even as Bitcoin has recently breached the psychologically important $30,000 mark. That would suggest further interest in bitcoin, the leader in cryptocurrency trading, but Binance has slipped.

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On June 26, Binance's 24-hour trading volume was less than $9 billionaccording to CoinMarketCap.

Its daily market share is around 47%. They used to account for more than half of all cryptocurrency transactions. Bloomberg reported that pressure on their market share will be felt even more once traditional Wall Street firms like BlackRock
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start opening exchange business, something the SEC might prefer, as the regulator wants the crypto investment market to look exactly like the traditional stock market. In that case, the exchanges cannot charge fees or profit from the transactions, just as the NYSE is not a trading platform. This may be the simplest problem facing crypto exchanges, according to the SEC lawsuit against Coinbase.

Last week, Belgium's securities regulator: Markets and Financial Services Authority – ordered Binance to stop offering cryptocurrency exchanges in the country.

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Binance withdrew its license application with Austria, and it didn't get approval in the UK, the Netherlands and even Cyprus, not exactly known as a "know your customer" country. (Cyprus is a known Russian island of money laundering outside Türkiye.)

Many cryptocurrency exchanges have been saying that Coinbase and now Binance are right: The SEC has no clear rules for cryptocurrency exchanges to thrive. They say these exchanges will move to other places, including Europe.

“The entire crypto industry has been increasingly vocal about the lack of transparency in the US regulatory approach,” Hedi Navazan, Head of Compliance and Regulatory Affairs at Amsterdam-based Crystal Blockchain. “Crypto companies are moving abroad to countries that are looking for regulatory innovation,” he said, citing Hong Kong and the United Arab Emirates, though Hong Kong carries its own set of risks as Beijing exercises much legal control. greater than the autonomous region of Porcelana. He also mentioned the EU crypto asset market law.

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But now that Binance is being asked to leave Belgium and withdraw its license application in Austria, Binance does not want to follow the rules in Europe or the rules are unclear.

Navazan says he believes the EU “stands firm” behind handing out clear rules to the industry to attract global crypto companies there.

Binance is quite illustrious global advisory board he has not been able to successfully lobby, at least not yet, and on behalf of CZ.

This board includes former US Ambassador to China Max Baucus; the head of the French Treasury and president of the Paris Club, Bruno Bezard; Obama presidential campaign adviser David Plouffe; and David Wright, former Deputy Director General for Financial Markets at the European Commission, among others.

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Imagining the worst case scenario for Binance

What we've seen of late is that no matter what A-list cryptocurrency explodes, bitcoin is holding steady and interest in growth prospects remains high, as shown by traditional Wall Street firms wanting to be in the exchange business. .

Could any of them buy Coinbase? Or Binance.US? It's possible.

But in the meantime, Binance's woes are not seen as a blow to Bitcoin, according to the consensus view.

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Still, the market loves pessimism.

“I have studied this lawsuit and analyst comments on this matter well. If everything goes according to a bad scenario, Binance.US will not be able to exist. If so, CZ will be constantly throttled,” thinks Vladislav Garmash, founder and CEO of Marlerino Group, a Dubai-based marketing firm that works with blockchain players and others.

Garmash has some forecasts if Binance.US pulls out. First, the market markers in the US will disappear for Binance, which would hurt the liquidity of the exchange. Binance International payment services in the US would be shut down, tripping up people trying to cash out on that exchange.

“Billions of fines are waiting for CZ, including in the worst case the return of all commissions for all natural and legal persons located in the United States, as of 2017, in addition to civil penalties in the case of the SEC," he says. “If Binance crashes, he's serious,” Garmash says, sounding darker than I've heard from the FTX debacle. Remember there was talk of CZ buying FTX. That never happened. FTX had Tom Brady and Larry David promoting their products. He is now dead, but cryptocurrencies are still alive.

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Garmash is less optimistic if the same fate befalls CZ and Binance.

"The entire cryptocurrency market will cease to exist as it is now," he says. “It will be a bitcoin market for geeks,” he says, though that would have to include JP Morgan, BlackRock and others on Wall Street, who hardly consider themselves tech geeks. “I hope the worst case scenario doesn't happen,” says Garmash. “It will be bad for the whole market.”