Last week, Sam Bankman-Fried, founder of failed cryptocurrency exchange FTXwas finally detained by authorities in the Bahamas.
This marks the end of a dark chapter in cryptocurrency history that resulted in the removal of a number of bad actors, leaving the path clear for the industry to move forward and build on the future. next market cycle.
While we're all glad to see Mr Bankman-Fried behind barsbeing now the accusations raised against the biggest FTX competitor, Binancethey are questionable.
On the same day that Mr. Bankman-Fried was arrested, news emerged that federal prosecutors in the US are considering filing Criminal Charges Against Binance Bosses including the CEO and founder Changpeng "CZ" Zhao for alleged money laundering and violations of criminal sanctions.
The Justice Department has discussed possible plea deals with Binance's lawyers following a series of cases in 2018 in which criminals reportedly used Binance to transfer illicit funds, Reuters reported.
Tigran Gambaryan, Binance's head of intelligence and investigations, responded to this by saying that the company has, in fact, responded to more than 47,000 law enforcement requests since November 2021.
In addition to the allegations, investors have apparently been fleeing Binance due to fears stoked by its reserves report released in early December, which some experts say did not go into enough detail. This has led to around $2 billion in withdrawals from the exchange, as of December 14.
Politics or personal revenge?
Originally founded in China and currently registered in the Cayman Islands, with subsidiaries in some 40 locations around the world, Binance has always operated in a regulatory gray area, which has undoubtedly caused headaches for global regulators.
So it comes as no surprise that as global watchdogs turn their attention to the cryptocurrency sector, Binance is caught in the crossfire.
However, it's hard not to see a certain degree of political opportunism at play here.
Mr. Zhao has been in the blockchain and cryptocurrency industry since 2014, scaling it as a centralized institution and also building decentralized finance through Binance Smart Chain and decentralized solutions like PancakeSwap and others.
Binance was scaled with ingenuity, competitiveness, and a focus on execution and meeting customer demands at all times.
Never, despite attacks and blockages, have you lost customer funds. In fact, the fact that $2 billion has been smoothly withdrawn from the platform shows that there is no problem with liquidity.
Mr. Zhao and Binance are also operating and licensed in numerous jurisdictions in Asia and the EU, and has a separate entity, Binance US, licensed and regulated in the US.
Mr. Zhao is a Canadian citizen of Chinese descent who owns 100 percent of Binace. He has worked tirelessly to build Binance Company with passion, dedication, and integrity, and it is disappointing to see the circumstances in which he is charged.
Drama fatigue sets in
Yet despite the political wrangling, the markets keep going.
From a cycle low of $15,599, Bitcoin recently soared above $18,000, while Ethereum (ETH) traded near the $1,300 mark, up from a low of $1,081 on Nov. 22.
The market has pulled back a bit on warnings from the US Federal Reserve that we have not yet seen the end of rate hikes, however the signs remain positive.
Data from analytics firm Santiment shows that addresses that already hold large amounts of ETH have been adding to their holdings.
CryptoQuant's on-chain data has recently allayed concerns about Binance's balance sheet with a recent report showing that the exchange's reserves are 89 percent "clean," meaning they consist of third-party assets not operated by Binance. .
Cryptocurrencies: in pictures
Meanwhile, crypto companies are doing what they do best during bear markets: putting their heads down and building the future of decentralized finance.
According to the H2 2022 Developer Survey Conducted by Hiro, a Web3 developer toolkit, 55 percent of respondents said the bear market has only fueled their desire to create innovations in this space.
Many lessons will be learned from the collapse of UST, Celsius, FTX and others this year, lessons that will eventually lead to a stronger and truly decentralized cryptocurrency ecosystem of the future.
Those who suggest that cryptocurrencies are down as a result of recent events have failed to understand just how resilient this space is, and how talented those who run it are.
Far from dead, crypto is about to experience its brightest dawn yet.
Stefan Rust is the founder of Laguna Labs, a blockchain development house, and former CEO of bitcoin.com
Updated: December 21, 2022, 4:00 am
