What is going on with Binance’s U.S. business? Details
CEO Changpeng Zhao of Binance has disputed rumors that the company is about to sever connections with its American business partners and delist tokens from US-based projects, including Circle’s USD Coin (USDC).
Recently, the company has been under greater regulatory attention from US authorities; thus, this news comes at an interesting time.
What sparked the rumor?
Earlier this week, it was reported by Bloomberg that Binance was considering severing ties with financial and other service providers. Tokens like USDC may be delisted as they reevaluate their venture capital investments in the United States, according to reports.
CZ oppugned the idea of a “US-based token” and tweeted that Blockchain has no boundaries in response to the claims. He also said that his company is holding off on bidding or investing in several insolvent American firms until it receives approval.
Customers in the United States are told to use Binance.US. US authorities are now looking at both companies. Binance.US and trading businesses with direct links to CZ are apparently under investigation by the US Securities and Exchange Commission.
On February 8, Binance Holdings suddenly stopped processing US dollar bank transactions, indicating there may be issues with the company’s financial system.
In light of rumors that the SEC was planning a lawsuit against the dollar-pegged stablecoin BUSD, the New York Department of Financial Services ordered Paxos Trust to cease minting the coin on February 13. It caused a flood of withdrawal requests to reach Binance.
On February 15, Binance’s chief strategy officer Patrick Hillmann was quoted as saying the business anticipated financial fines from US authorities owing to prior compliance concerns.
The world’s largest exchange continues to weigh the costs and benefits of complying with these regulations and making the required adjustments to its business strategy to best serve its worldwide user base.
On the other hand, fresh sources warn that the firm may be in for further legal difficulties in the US.
Unauthorized Binance insider trading
In related news, another transaction was performed on Binance by a wallet on February 17 that had been involved in early token listings. This time, the trader bought Gains (GNS) tokens and sold them immediately before the tokens were listed on the most prominent cryptocurrency exchange in the world.
A crypto trader, whose identity has been kept secret, gained almost $100,000 by buying a token minutes before it was posted on Binance, according to a study by Lookonchain.
Only 30 minutes before Gains Network (GNS) tokens were launched on Binance, the on-chain detective uncovered a trader who acquired them for $208,335. Within an hour of the listing, GNS’s price had risen 51%, from $7.92 to $12.01, allowing the trader to generate a profit of $106,747.
The deal was mockingly labeled “smart money” in a tweet by Lookonchain. Yet, the United States, Canada, the European Union, and many other jurisdictions worldwide make it unlawful to engage in insider trading.
An example of trading on non-public information that might damage market integrity and fairness is trading on information regarding a listing that has not yet been made public.
