And thus another giant in the centralized crypto sphere showed their true colors. It appears Binance was cutting more than just corners as their CEO CZ stepped down while saying "I make mistakes and I must take responsibility" and the company is fined a staggering $4.3 billion dollar. But what happened, tag along as we try to find out.
Agencies put down the foot, the lead-up
Earlier this year there were several US agencies that filed suit against Binance, among them CTFC and the SEC. At the time there were also suits filed against Crypto.com. And these charges looked, at the time, like nothing more than another SEC powerplay. This was at the height of their crypto crackdowns and regulations. But it appears that there where more to it than that.
Perhaps the fact that Binance had a total of 13 charges brought against them from the SEC, while Crypto.com more or less only got charges relating to selling unregulated securities probably should have been a red flag. Sadly the SEC with Gary Gensler at its helm had primed at least me to just think that they were using the three of litigation to force compliance. As they seemingly tried to do vs Ripple. And the way Gensler talked in interviews about crypto and the companies sounded like nothing more than marching orders "every crypto currency except Bitcoin is a security" and "they are blatantly breaking the law", and more things similar to that.
But it appears that Gensler had with this, at least managed to prove an old Swedish proverb correct; in that even a blind hen picking, will eventually find food. So my hat off to him. *takes my hat off*
And if you have missed it, this has resulted in a $4.3 billion dollar fine for Binance. Their CEO Changpeng Zhao has pled guilty to the allegations, meaning he knew all along what was happening and what was going on. But perhaps more importantly did he already tell us there were shady things going on?
What about the taunts?
CZ or Changpeng Zhao as is his name, the former CEO of Binance. He started 2023 by on January 2 tweet his four New Year resolutions. Of those, it appears no one truly ever where relevant, the 4th and last one. But here they are in their entirety; "Will try to keep 2023 simple. Spend more time on less things. Do's and Don'ts. 1. Education 2. Compliance 3. Product & Service 4. Ignore FUD, fake news, attacks, etc. In the future, would appreciate if you can link to this post when I tweet "4"."
That meant for the rest of 2023 we would simply get posts like this from Changpeng whenever he or finances faced what he thought were FUD. And I have to say, while I am not that active on twitter, and I totally missed this approach from Changpeng. It was first while researching this post I can only think of the similarities between Changpeng and Alex Mashinsky and he vehemently also just called everything and anything negative or inquisitive as FUD and dismissed it and told everyone to dismiss it too. It seemed like they went to the same a-hole class and both got A´s.
Something else that actually just now stuck with me was Changpeng´s New Year resolution tweet. So much so that I included it, not only in text but as a picture here above. Now take a look at it again, please. Did you catch it? Of course, you did. I know pretty funny and interesting right? You want me to explain it just in case someone did not get it, well ok. If we look at the tweet we see it is a list of 4 things and they are as he says "Do's and Don'ts". This means that there is at least one "don´t" included on the list, or why else say it is a list of do and don't.
Given the current layout where 1-3 are grouped together, it seems to imply that they are of the same type. And with them being things that are by and large "positive" I think we can safely assume they are meant to be things he should do. That leaves the "Ignore FUD, fake news, attacks, etc." as the only single thing on the list that is a don't, right? So was Changpeng so cheeky that he actually told us all along that there were truths to the allegations against Binance? By saying we should not ignore FUD, fake news, attacks and so on.
Or it is perhaps the other way around. Changpeng is using our assumptions against us. In that, we assume he will put the Do´s first and the Don´ts last. But in actuality, he flipped it. Meaning he will not do any of 1-3. And seeing he is guilty of a lot of things it holds up. And he will ignore FUD and inquisitive legitimate questions. That also holds up. This then means that in every tweet after this where Changpeng is holding up his 4 fingers, like in the picture above, or simply tweets a "4", he is openly taunting up, saying look what I am getting away with. You are just too blind to see it, I even said you should not ignore the "FUD".
The Binance story
If you want to get a good or long briefing about the story and some of the red flags, I recommend watching Coffeezilla´s video about it. Or reading Reuters articles about Binance. Both included.
Personally, I feel like these things happening over and over, with FTX and now Binance. Just gives the anti-crypto people more and more ammunition. Why cant there simply be a company that does not cut corners, that does not help criminals? Is that really too much to ask in 2023? I just hope they lock him and the other a-holes up for a long time and throw away the key. Fingers crossed we will not see any of these persons in crypto again, or anywhere else for that matter.
So far there has not been a bank run on Binance either. And that means they might be able to stay afloat barely after paying the fine. If they come crashing down alongside FTX it will land another serious hit on the already bruised body of the crypto industry in the eyes of the public. This means it will slow done addition rates, giving CBDCs more time to pass and get adopted competing out crypto and everything else that comes with them.
And yes this post did shift from its original idea of a deeper look into Binance, to a more entertaining one. Seeing we usually have so much crappy news all the time, I thought we could do with a little more smiling. Which you hopefully did after reading this. But please let me know what you think about Binance's hands not only getting caught inside the cookie jar but inside the cookie factory while getting the door slammed on them. Will this be the end of Binance?
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See you on the interwebs!
Picture provided by: Fair use, https://unsplash.com/