Binance deals with concerns and uncertainties about its business future due to a lawsuit by U.S. regulators.
The latest entity to catch the attention of U.S. regulators is Binance, the largest cryptocurrency exchange globally by trading volume. The Commodity Futures Trading Commission (CFTC) has initiated a lawsuit against the exchange for alleged regulatory breaches, ranging from insider trading to global office concealment to bypass regulatory scrutiny.
Binance has rejected these allegations, hinting at another legal battle brewing between crypto enterprises and U.S. regulators. Meanwhile, the fate of Binance’s U.S. branch, regarding its $1 billion deal for Voyager Digital’s assets, hangs in the balance until the Department of Justice takes a stand on Voyager’s bankruptcy plan.
Despite legal struggles, indications of a receding crypto winter are emerging. For instance, Galaxy Digital, billionaire Mike Novogratz’s firm, posted a profit following a $1 billion loss in 2022. Meanwhile, China remains steadfast in its fintech advancement, emphasizing blockchain technology.
This edition of Crypto Biz explores how Binance is tackling ongoing uncertainties about its operations and how firms are navigating the terrain of Web3 opportunities and challenges.
Binance CEO, CZ, dismisses market manipulation allegations
In response to a CFTC lawsuit, Binance CEO Changpeng “CZ” Zhao dismissed accusations of market manipulation, describing them as “an incomplete narrative of facts.” Zhao maintains that Binance conducts “trades” in several scenarios, mainly to convert crypto revenue to cover expenses in fiat or other cryptocurrencies. He confirmed maintaining two personal accounts at Binance: one for Binance Card and another for his crypto assets. Zhao underlined Binance’s 90-day no-day-trading rule for its personnel and dispelled allegations of insider trading.
Galaxy Digital rebounds to profit following $1B loss in 2022
Galaxy Digital, a digital asset investment firm spearheaded by billionaire Mike Novogratz, rebounded to a profit after a net loss of $1 billion in 2022. The firm reported a preliminary pre-tax income of $150 million from Jan 1, 2023, to March 24, 2023. Novogratz attributes this turnaround to strategic decisions made during the previous months and Bitcoin’s price recovery. Like many other crypto-focused entities, Galaxy Digital found 2022 to be a difficult year.
Disney reportedly disbands its metaverse division
Disney appears to be pulling away from the metaverse. A restructuring plan aimed at reducing operating expenses by $5.5 billion and laying off 7,000 employees over two months has led to the entertainment giant dissolving its metaverse division. The primary reasons behind this decision were unfavorable economic conditions and increased competition in the streaming sector.
China aims to enhance national blockchain standards by 2025
Despite its stance on cryptocurrencies, China is proactively fostering its fintech industry, with a specific focus on blockchain technology. The Ministry of Industry and Information Technology, China’s fintech watchdog, plans to enhance blockchain technology development standards by 2025. This initiative aligns with China’s five-year plan for “National Economic and Social Development and Vision 2035,” where blockchain technology is recognized as a growth target.