- Binance is under the radar of strict regulators worldwide.
- The exchange reported a brief technical issue associated with its Futures UM today.
In the wake of the FTX’s fall, most regulators and lawmakers worldwide are tightening their regulatory stance towards the crypto industry. Specifically, the US regulators — SEC, and CFTC – pulled in major crypto exchanges including Binance, Coinbase, and Kraken under their keen regulatory radar.
Binance, the largest cryptocurrency exchange, fell into the screening list, targeted by strict regulators since its BUSD-linked issue. Since then, 2023 started with a not-so-smooth pace for the exchange. The BUSD lawsuit against Paxos influenced huge outflows from Binance. Subsequently, allegations from the US CFTC bolstered a harsh period. Since then, the storm of allegations and charges around Binance has not calmed down.
Last week, the Australian regulator revoked Binance’s license and urged it to shut down the derivative services in the region. And the fall of its significant banking partner, Signature Bank, affected the exchange’s US unit. It weighed down as an obstacle to aiding its client’s cash.
Moreover, in the Asian afternoon hours today, Binance reported an API and UI issue related to its Futures USD-Marginated (UM) contracts-linked trades. A few hours later, Binance CEO CZ affirmed to the community the issue was resolved and cited server errors as the reason.
Binance and FTX — “Same Risk and Fate”?
Significant regulators and investors are recommending that Binance “disclose ownership” to prove its regulatory compliance. Despite acquiring 16 licenses globally, this largest cryptocurrency exchange is still suspected of violating the laws and adopting non-compliant activities.
In a recent interview with CoinDesk, Kevin O’Leary, a renowned investor and famed Shark Tank celebrity, pointed out a similarity between Binance and the collapsed FTX. That is, Sam Bankman-Fried’s FTX deeply rooted its empire in the native token FTT. Lately, reports traced Binance’s portfolio was majorly reliant on a single token — BUSD. The exchange, reportedly, held its $64 billion in 2 wallets.
O’Leary criticized and tagged this as an illegal act from the viewpoint of the global banking system. FTX’s flaw was that it bet its fortune on FTT and made no proper disclosure about its operations. Likewise, he made a comment that if Binance continues to do the same by being in the “shadows as a rogue entity”, it would risk it all just like FTX.
Adding up to the regulatory scenario, he added:
“The pioneers of crypto, all rogue entities, all players who build platforms outside of the jurisdictions of compliance all around the world, I bet you within 36 months to 5 years they’re gone.”
He went on to state that Binance has to pay the penalty and disclose details of its ownership to withstand the regulatory pressure. Notably, he signified the need for crypto entities to work closely with the regulators in order to advance alongside the global financial system. The investor expressed his optimism about the merger of the three important crypto exchanges in Canada.
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