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Binance is looking to replace FTX efforts in crypto regulation

Binance is looking to replace FTX efforts in crypto regulation

#Binance #replace #FTX #efforts #crypto #regulation Welcome to InNewCL, here is the new story we have for you today:

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Binance CEO Changpeng Zhao holds an eagle statue with the message in front of the Binance logo

Binance CEO Changpeng Zhao has repeatedly circulated the message that both his exchange and company are financially stable, but critics point out that the company is too opaque to get a good picture of its finances.Photo: Marco Rosi — SS Lazio (Getty Images)

Binance and its officials have routinely said they won’t be following in the footsteps of Sam Bankman-Fried’s rogue crypto empire, but they sure are taking games right out of the failed crypto founder’s playbook.

On Tuesday, Binance announced it would partner with the Chamber of Digital Commerce, itself a crypto trade association, to help in “talks with policymakers and regulators” to develop regulations for the blockchain industry.

“Such work is fundamental to our shared mission of promoting the sustainable development of sound cryptocurrency and blockchain regulations that ultimately ensure user protection,” said Joanne Kubba, VP of Public Affairs at Binance, in the press release.

If that sounds like déjà vu, it’s because before it imploded, FTX declared bankruptcy and multiple fraud investigations were launched against its executives, similarly positioned as a leading voice on blockchain regulation. FTX founder and CEO Sam Bankman-Fried, who will soon be returning to the US to face federal charges of fraud and violating campaign finance laws, made a generous donation to members of both parties. Before the roof fell on him, Bankman-Fried was pushing for a bill led by Senators Debbie Stabenow and John Boozman that would give the Commodity Futures Trading Commission more regulatory powers.

The chamber also heads a political action committee, which as of Nov. 28 has spent just over $15,500. That’s a paltry sum compared to what Bankman-Fried has spent, but it’s a step towards even more cryptocurrency falling into the hands of politicians.

Binance and Zhao, who often calls CZ, have issued statements about the need for some crypto regulation, though his newfound willingness to jump straight into regulatory processes coincides with other news that makes it appear Binance wants to follow in FTX’s run-down footsteps to fill. On Monday, failed crypto firm Voyager announced that it plans to donate just over $1 billion worth of its remaining assets, aka legacy client accounts, to Binance.US, the company’s US-centric arm Selling. Voyager filed for bankruptcy earlier this year and Brian Shroder, CEO of Binance.US, wrote “Our goal is simple: give users back their cryptocurrency in the fastest way possible.”

However, Forbes noted that only about $20 million of the acquisition would flow into the bankruptcy estate. It’s a very similar deal that US subsidiary FTX made with Voyager earlier this year, where the now-defunct exchange pledged $50 million in exchange for $1.422 billion in crypto.

The total amount Binance is willing to pay is important, especially considering when CNBC asked Binance CEO Changpeng Zhao if his exchange could suffer a $2.1 billion damage if those who bought FTX -Handling bankruptcy, attempting to reclaim an early investment, Zhao merely reiterated, “We are financially strong.” The company, which had conducted a selective “proof-of-reserves” audit on Binance, withdrew from all crypto-centric audits, After being criticized for how little those reports actually showed the financial health of various crypto firms, CZ said Monday its company was “consistently profitable.”

Crypto brothers retweeted by Zhao have attempted to claim that “Comparing Binance to FTX is ridiculous‘ citing Binance’s reserves. The problem is that Binance has refused to conduct a full audit of its company, as rival Coinbase has done, which would examine other liabilities instead of just analyzing whether Binance has a full piggy bank. Comments published by CoinDesk noted that Zhao’s responses did little to allay fears about the company.

The company’s opacity was noted in a major Reuters report on Monday. Binance does not list an official head office, which means it rarely, if ever, discloses financial information that other publicly traded companies regularly do, such as B. their liabilities, costs and income. Although Binance is a private company, the Reuters report found that it analyzed filings in the 14 jurisdictions where the company claims to be registered and that there was “little information” to indicate how well that was doing company cuts off. The company has made it clear that most of its revenue comes from transaction fees, and Zhao himself has claimed that they have no venture capital investments and “owe no money to anyone.”

That’s not to say that FTX’s declared “transparency” did anything to prevent the exchange from funneling billions of dollars in crypto from users to the hedge fund Alameda Research, which has led to all of these federal indictments. Nonetheless, Binance is currently under federal investigation for money laundering and violating sanctions. So, in this way, the two exchanges can have quite a bit in common.

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