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US’s financial watchdogs look into Binance as they get a whiff of illegal trading activities

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The citizens of the US have been subject to stringent laws with regard to crypto. This had further caused crypto platforms to set up shops exclusively for the citizens of the United States of America. Despite doing so, the world’s largest cryptocurrency exchange, Binance seemed to be shown in a bad light as regulators of the country have started an investigation.

In a recent report, it was revealed that the Internal Revenue Service, as well as the Department of Justice of America, were probing Binance Holdings Ltd. While the watchdogs did not announce or reveal any wrongdoing, they are reportedly yearning for information regarding illegal transactions carried out by someone from the United States of America.

US regulators dig deep into Binance; No wrongdoing found

While Binance has been time and again subject to random investigations, the exchange continues to maintain a clean slate. The exchange even went on to roll out, Binance.US, a platform just for the citizens of America. This did not seem to have stopped the regulators of the country from probing the exchange.

Addressing the latest news, Jessica Jung, the spokeswoman of Binance told Bloomberg,

“We take our legal obligations very seriously and engage with regulators and law enforcement in a collaborative fashion. We have worked hard to build a robust compliance program that incorporates anti-money laundering principles and tools used by financial institutions to detect and address suspicious activity.”

Additionally, CZ, suggested that this was nothing but FUD. Retweeting the Bloomberg report, Binance stated,

“We have a strong track record of assisting law enforcement agencies around the world, including in the United States.”

Amidst this, the crypto market was seen exerting extreme volatility. While Bitcoin [BTC] dropped down below $50K, the other coins followed. The market cap of the king coin also took a hit as it slipped below $1 trillion. Binance coin [BNB] followed suit as its price slumped down to $598.

Binance’s CZ Addresses Volatility In The Crypto-Verse

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The crypto-verse has been experiencing extreme volatility over the last couple of days. Binance’s CEO, Changpeng Zhao aka CZ, addressed this constant rise and fall in the price of cryptocurrencies over the last couple of days.

Volatility has been a great drawback for the crypto industry. While abrupt soars in the price of certain coins can bring extreme joy, untimely drops can cause a commotion. Individuals who seem to be intrigued by the industry have been sitting on the fence fearing volatility. The recent drop of Bitcoin [BTC] from a high of $64K to a low of $48K was noted as a classic example of the latter.

Appearing in Bloomberg’s latest interview, CZ went on to reveal his take on the extreme volatility that the crypto industry hoards.

Binance’s CZ Blames Herd Mentality For Volatility

Bitcoin’s price volatility is directly linked to herd mentality, Binance’s CZ pointed out. Comparing those who enter the crypto-verse, CZ noted that those who invest in crypto were through herd mentality were outdoing those who did their research before investing in the market.

While the price of crypto is usually dictated by the buying and selling activity of these assets, people who enter the market when there’s good news and rush out during bad news are the one’s behind the volatile nature of the industry, CZ asserted. Speaking about the same he added,

“The herd followers are less committed. Whenever there’s some negative news, they run away. Whenever there’s positive news, they try to rush in.”

Furthermore, just as the price of digital assets rose over the past couple of months, institutional investors started pouring their funds into it. CZ pointed out that certain large institutions were keen on “volatility trading.”

Debunking the myth of more institutional trading equals less volatility, the CEO of Binance added,

“They [institutions] seek volatility and they sometimes even want to generate the volatility. So it’s not to say that just because there’s more institutions trading, then there’s less volatility.”

Here’s How Binance Charity Fund Is Helping India As The COVID Second Wave Wreaks Havoc

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Binance’s charity arm has made several cryptocurrency donations as the COVID-19 pandemic grappled the world. In response to the severe healthcare supply and resource crunch in India, Binance Charity Fund [BCF] has revealed working to contribute to the relief efforts to help the community.

The non-profit organization has so far deployed 175 oxygen connectors in Asia, which, according to the exchange’s CEO, Changpeng ‘CZ’ Zhao, should arrive in Indian hospitals within a week. The total expenditure was around $200k. His tweet regarding the same read,

“Our charity team Binance BCF have so far located 175 oxygen connectors in available stock in Asia, cost roughly $200k, and it should arrive in Indian hospitals in 7 days. Still working on 1000 more. Our prayers go out to everyone in India fighting this pandemic. Stay SAFU!”

Binance’s Previous Contribution During COVID-19 Pandemic

Binance Charity has made the world’s first crypto donation to the role of United Nations International Children’s Fund [UNICEF] in the global vaccine rollout. The platform had reportedly donated a whopping $1 million in crypto to UNICEF which is set to target the organization’s role as the key delivery partner for the COVAX Facility.

Back in June 2020, the donation platform had rolled out the campaign along with ‘Crypto Against Covid’, which offered over $4.38 million in donations to the then pandemic hotspots across the globe including countries like India, China, Italy, Japan, Spain, United States among others.

Since the start if the ‘Crypto Against Covid’ campaign on the 24th of March 2020, BCF has received a total crypto donation of 262.877 BTC, around $14.9 million at press time price. While 73.99 BTC has been allocated, 188.88 BTC was still pending as of 2nd May 2021.

TWJ had earlier reported how India witnessed support from all around the world as the pandemic fueled crisis wreaked a havoc. Justin Sun, the CEO of the blockchain company Tron, had also joined a group of many popular players such as Ethereum’s Vitalik Buterin, and former Coinbase CTO Balaji Srinivasan who united to contribute to a fund created to provide relief. This fund set up by Sandeep Nailwal, the Co-founder and Chief Operations Officer of Polygon on the 24th of April.

Binance Jumps On The NFT Bandwagon; Binance NFT To Go Live In June

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NFTs have caused an uproar in the crypto market, and Binance has not backed down. The world’s largest cryptocurrency revealed its enthusiasm for nonfungible tokens [NFT] by announcing the launch of its own NFT platform.

NFTs are nothing but digital collectibles that one can purchase online. However, this innovation uses blockchain technology and is bought with cryptocurrencies.

Binance earned its way to the top by making timely upgrades and releases. The crypto platform has managed to garner a large user base across the globe. The exchange had made sure to stay on par with the ongoing trends. Once again, with Binance NFT, the platform has proved that it would retain itself in the first place for quite a while.

Binance NFT To Start Operating From June 2021

In a recent press release, the crypto exchange revealed that it would be soon launching a platform exclusively for NFTs. With this platform, Changpeng Zhao’s exchange intends to provide minimum NFT transaction costs by employing the Binance blockchain.

Users would reportedly be able to use this imminent platform without any hassle of creating a new account. Users would be able to use their existing Binance.com account as they share the same system.

Speaking about the exchange’s latest venture, its CEO Changpeng Zhao aka CZ asserted,

“Binance serves millions of users around the world, many of whom will now be able to access the booming NFT space. In line with our commitment to the freedom of money globally and building an inclusive ecosystem, the Binance NFT marketplace will also support small value creators by providing the highest liquidity and cheapest fees for users.”

Furthermore, the platform revealed that with Binance NFT, users, with a processing fee of 1%, would be allowed to create NFTs. While this falls under the “Trading Market” category, the “Premium Event” section enables users to carry out collaborations as well as curated collections further allowing artists to garner about 90% gains from the sale of NFTs.

Additionally, Helen Hai was appointed as the Head of the exchange’s NFT wing. Elaborating on the prospects of the NFT platform, Hai added,

“Our aim is to provide the largest NFT trading platform in the world with the best minting, buying and exchanging experience, by leveraging the fastest and cheapest solutions powered by the blockchain infrastructure and community.”

Binance Announces Stock Tokens For Microstrategy, Apple, Microsoft

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Cryptocurrency exchange, Binance announced support for three stock tokens of industry behemoths – Microstrategy [MSTR], Apple [AAPL], and Microsoft [MSFT] today.

The stock token for business intelligence company, Microstrategy [MSTR/BUSD] will be listed on the 26th of April while that of American multinational tech firms Apple [AAPL/BUSD] and Microsoft [MSFT/BUSD] will be made available on the 28th and 30th of April respectively.

The stock tokens on Binance’s platform are shares of public companies that trade on traditional stock exchanges. The Malta-based cryptocurrency exchange had previously detailed that each Stock Token represents one ordinary share of the relevant stock which is completely backed by a depository portfolio of underlying securities maintained by its partner CM-Equity AG, Germany who are tasked with monitoring all trading activity for compliance.

Binance competitors such as FTX as well as Bittrex Global also offers trading in stock tokens through CM-Equity.

The Founder and CEO of the platform, Changpeng ‘CZ’ Zhao had recently asserted that the latest move was the indication of seamless democratization of value transfer by reducing friction and costs to accessibility, without bargaining on factors such as compliance or security.

The latest development comes around two weeks after Binance announced venturing into the space of tokenized stock trading with the listing of Tesla stock tokens, which allowed the exchange’s users to buy Tesla tokens representing its shares.

Binance’s Stock Token Raises Red Flag

Binance had come under the scrutiny of the European watchdogs including the UK’s Financial Conduct Authority [FCA] for its stock token offering that was launched earlier this month. According to reports, the regulators were now probing whether it adhered to security rules before rolling out.

The UK’s Financial Conduct Authority was quoted saying to the Financial Times that it was working with Binance to examine the product, “the regulations that may apply to it and how it is marketed”. It also went on to add that,

“..firms and their senior management teams are responsible for determining whether their products and services fall within the remit of the FCA.”

Binance Is All Set To List FC Barcelona Fan Token [BAR] With 30% Discount

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Malta-based cryptocurrency exchange, Binance announced that it is all set to list FC Barcelona Fan Token [BAR] in its Innovation Zone.

According to the official press release, the exchange revealed that it was bringing another Launchpad subscription format to its standard listing process for FC Barcelona Fan Token [BAR]. This will enable the users to buy BAR tokens using Binance Coin [BNB] at a 30% discount prior to the trading start time.

Binance-FC Barcelona’s Token

The blog also read,

“Binance will list FC Barcelona Fan Token (BAR) in the Innovation Zone and open trading for BAR/BTC, BAR/BUSD and BAR/USDT trading pairs at 2021-04-21 11:00 AM (UTC). Users can start depositing BAR now in preparation for trading.”

Discount sale hard cap is $2,000,000 with 1 BAR being equivalent to 0.04512816 BNB. Moreover, hard cap per user is 112.10 BAR and 0.19% of total token supply or 74,735 BAR tokens are offered for the discount sale.

FC Barcelona Fan Token [BAR]

The FC Barcelona Fan Token [BAR] is a utility token that gives premier soccer club Barcelona Football Club fans a tokenized share of input on club decisions and workings using the Socios application and services. This digital token was offered by the club via a partnership with blockchain firm Chiliz. In short, the Barca fans holding these coins can utilize the token to buy football club merchandise and tickets.

Furthermore, 600,000 tokens were initially allocated to club fans through a Fan Token Offering from the total supply. Barcelona had previously made $1.3 million in sales after launching the fan token. The remaining tokens are held by the club and can be acquired by participating in community activities, and by purchasing directly on cryptocurrency exchanges.

Over the last couple of months, Binance had listed several tokens on its Innovation Zone. The exchange had launched the “Innovation Zone” in September last year to allow only select cohort users to trade new decentralized finance [DeFi] tokens. The main objective of rolling out this platform to filter out users based on their risk appetite.

Binance Postpones Coinbase’s COIN Stock Token Listing Citing ‘Volatility’ Concerns

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Cryptocurrency exchange Binance has announced that it has postponed the listing of Coinbase Stock Token [COIN] due to market volatility issues. The official press release stated that investors will be notified once the COIN/BUSD pair is available for trading on the platform.

This came just hours after the exchange announced adding support for tokenized version of Coinbase stock for trading. This was the second stock token listing after TSLA which were zero-commission digital tokens that are fully backed by a depository portfolio of underlying securities representing the outstanding tokens.

Events that unfolded after the high-profile Coinbase’s debut on Nasdaq

The Coinbase listing occurred without the IPO route. The cryptocurrency exchange, instead, went ahead with the Direct Listing route under the ticker symbol ‘COIN’. 

COIN’s reference price was set at $250 by Nasdaq. However, the shares made a debut of more than 50% higher at $381 before making a climb to $424. It was no less than a landmark event for the cryptocurrency market with Coinbase’s valuation briefly rising to above whopping $112 billion.

Failing to retain this level following the excessive market frenzy, COIN dropped to $313 subsequently closing at $328.28 per share on Wednesday, with the valuation of the exchange at $85.8 billion on a fully diluted basis.

In the wee hours of 15th April, however, the shares of the platform rose to $361 in premarket trading. This could have been triggered due to the three funds at Cathie Wood’s Ark Investment Management buying the shares. According to reports, the flagship Ark Innovation ETF, Ark Fintech Innovation ETF as well as Ark Next Generation Internet ETF made a massive purchase of a combined 749,205 shares of Coinbase.

Despite the high-profile launch, concerns regarding volatility in the realm of digital assets and regulatory uncertainty continued to linger in the Brian Armstrong-led company’s share price. However, several experts weighed in that Coinbase’s growth has been quite impressive and despite its competitors creeping in closer, it still has an upper hand.

In the latest edition of CNBC’s “Squawk Box Europe”, Carol Alexander, a professor at the University of Sussex Business School, opined that risk management from a regulatory and the operational point of view is “much better on Coinbase” as opposed to its rivals.

Alexander also went on to add,

“They’ve got this solid revenue stream from the fees and the custodial services as well. There’s no real competitor to them on the centralized exchanges because Kraken, Gemini — I don’t think they’re the next ones to go.

Binance Adds Support For Coinbase Stock Token Hours Before NASDAQ Listing

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Coinbase’s IPO is a big moment for the entire cryptocurrency industry. Its decision to enter the market through a direct listing sparked enough curiosity and has generated high expectations.

Taking the opportunity, its counterpart, Binance has announced support for Coinbase Stock Token [COIN] on the 14th of April which will market the beginning of the COIN/BUSD trading pair. According to the official press release by Binance, the stock tokens are zero-commission digital tokens that are completely backed by a depository portfolio of underlying securities representing the outstanding tokens.

COIN holders would qualify for economic returns on the underlying shares, which includes dividends. This is the second such listing by Binance which had announced zero-commission, tradable stock tokens on the 13th of April starting with Tesla.

Coinbase happens to be one of the most valuable companies and the first-ever in the crypto industry to enter the US stock exchange.

Things To Expect After Coinbase Debut

The highly-anticipated development has triggered Bitcoin and the cryptocurrency industry to go for a record-breaking surge. The market expects to see dramatic, and potentially protracted, swings in the days to come as the space strives for mainstream adoption.

Coming back to Coinbase’s D-Day, Nasdaq had set a reference price for the firm at $250 per share.

If the shares in circulation, coupled with stock options and restricted shares, are taken into consideration, it can be found that the cryptocurrency exchange’s overall valuation will start a little above $65 billion. In addition, of the SF-based exchange hits the public market around its latest private market valuation of $100 billion, it would straight away be one of the 85 most valuable US companies.

It is safe to say that with a figure as huge as this, Coinbase not only has more users and revenues than many of the largest Wall Street biggies but also becomes the biggest US stock market entrant since ride-hailing business company Uber back in 2019.

Kraken’s Head of Growth Dan Held tweeted about about potential spillover effect into other crypto sectors following Coinbase’s big debut:

“Exchange valuations will likely be surging post-Coinbase IPO. That + general organic upswell of users could cause a spillover into other types of Crypto companies like wallets, custodians, etc.”

Binance Launches Trade Stock Tokens; Begins With Tesla

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Binance, the cryptocurrency exchange, announced the launch of tokenized stock trading in collaboration with CM-Equity AG, a licensed investment firm in Germany, and Digital Assets AG, a Swiss-based asset tokenization platform.  With this, the first Binance Stock Token that was listed was Tesla Inc. with the trading pair TSLA/BUSD that went live on the 12th of April.

With this development, the users of the platform will be able to purchase fractions of actual Tesla share [which was trading at around $677].  However, it is not available to residents of the United States, mainland China, Turkey, or other restricted jurisdictions.

According to the official press release, Binance Stock Tokens are zero-commission digital tokens that are completely backed by a depository portfolio of underlying securities that essentially represents the outstanding tokens. Holders of stock tokens qualify for returns on the underlying shares, including dividends.

The main objective behind the latest move by Binance is to lower the bar for entry into high-priced stocks for potential investors.

Shortly after the announcement, the CEO of the Malta-headquartered exchange, Changpeng “CZ” Zhao, thanked Tesla chief Elon Musk in a tweet and further asserted,

“Stock tokens demonstrate how we can democratize value transfer more seamlessly, reduce friction and costs to accessibility, without compromising on compliance or security. Through connecting traditional and crypto markets, we are building another technological bridge for a more inclusive financial future.”

CZ also noted that the roll-out of Binance’s stock tokens opens up new avenues for not just crypto but also traditional investors. This launch would allow users on the platform with proper knowledge about crypto’s fractional properties to be able to branch out into equity assets with the help of a cryptocurrency and platform they are accustomed to.

Binance Coin [BNB] Price React Positively

BNB

The exchange’s native token BNB has seen a surge of 53.34% over the past week and was currently trading at a price of $576.80 as it continued to hover close to its ATH. In fact, it was up by over 3% in the past day further strengthening its position as the third-largest crypto-asset by market cap.

Binance’s CEO CZ Clarifies Claims Regarding CFTC Probe

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The increased demand for cryptocurrencies has paved the way for many governments to take a deeper look into the industry. Binance, the largest cryptocurrency exchange, seems to be the latest platform under the US government’s purview.

The US government has been receiving immense backlash for its stringent laws against crypto. While several platforms have moved out of the country, others like Binance have rolled out exchanges exclusively for the citizens of the US. Despite this, the Commodity Futures Trading Commission [CFTC] of the United States of America reportedly revealed that the platform was being investigated.

An anonymous source allegedly disclosed that the cryptocurrency platform was being investigated by the CFTC over certain derivative trades carried out by users from the US. While no official statement by the CFTC was released regarding the matter, the source affirmed that Binance wasn’t accused of any wrongdoing.

Speaking about the same, CZ added,

“We’ll continue to improve our compliance. We’ll also work very actively with regulators around the world to improve the compliance standards of the industry.”

Binance’s CZ: “An Investigation Doesn’t Mean They’re Trying To Charge Us”

This investigation came as a shock to several, however, Binance decided to stay quiet about it. But, appearing in an Ask Me Anything [AMA] live stream on Clubhouse, the CEO of Binance Changpeng Zhao went on to address the latest issue. He stated,

“This is a topic that just came up, literally like a few minutes ago or an hour ago. So number one, the news article said there was no, I don’t have it in front of me, there was no “misconduct,” I have to dig it up. So number one there was no report of misconduct from Binance, so the report kind of defeat itself.”

CZ also clarified that an investigation did not mean that the CFTC was trying to charge Binance with something. He went on to say that the “story doesn’t have any teeth.”