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Binance vs. DOJ: Checkmate for the Crypto Giant?

Wed 27 Sep 2023 ▪ 4 min of reading ▪ by Mikaia A.
Crypto regulation

With over 100 million users, Binance easily claims the title of the world’s largest cryptocurrency exchange. If CZ’s exchange were to fall victim to the initiatives of U.S. regulators, others (Kraken, Coinbase, and the like) would melt away like snow in the sun. And apparently, the U.S. Department of Justice is preparing to launch an assault on this crypto behemoth with feet of clay.

Chess pieces, crowd image, DOJ, and Binance logos

Binance About to Be Attacked by the DOJ

The semblance of calm brought about by Judge Faruqui’s injunction to find common ground between Binance and the SEC is causing concern among observers. The crypto regulator is not one to be easily defeated in a battle. The Ripple case reminds us of what it is capable of, even in the case of a proven victory.

If the DOJ Attacks, Binance Will Fall

The WSJ article highlights a final end for the largest cryptocurrency exchange platform. The legal attacks by U.S. financial regulators, the SEC and CFTC, would indeed resemble a preview of the fate reserved by the U.S. government for Binance.

Will the DOJ, which has been investigating CZ’s crypto exchange for four years, finally enter the arena to deliver the final blow? Analysts seem increasingly concerned about this.

According to PYMNTS, an institutional crypto trader has already taken precautions to avoid any damage related to Binance’s collapse. Thus, he and his company did not hesitate to conduct “rapid evacuation exercises” of crypto assets from this centralized exchange (CEX) recently.

“You just can’t quantify what would happen to the industry if Binance disappeared, given it has been responsible for fostering a huge amount of innovation and growth,” says Anthony Goergiades, General Partner at Innovating Capital.

Incoming Game Over? Conditions Are Met

So it’s time for speculation, and even preparation, for some cryptocurrency investors registered on Binance. Many signals show that this crypto giant is approaching the terminus:

  • recent departures of senior executives;
  • mass layoffs of employees (at least 1,500 for this year alone);
  • questionable liquidations on the cryptocurrency exchange;
  • regulatory challenges exacerbated by an SEC that has become very aggressive towards the cryptocurrency industry;
  • a decrease in bitcoin transaction volume leading to disruptions in the entire crypto sphere;
  • BNB in a lethargic state.

In other words, Binance had weakened since the beginning of the year. Changpeng Zhao’s company can no longer handle about half of the cryptocurrency transactions at the moment. Whereas at the beginning of the year, it had captured 70% of cryptocurrency buying and selling.

Zhao may reassure the crypto community about Binance’s strength, but it’s no use.

His lieutenants are also stepping up to the plate. To name just one, Yi He, co-founder and chief marketing officer of Binance, did not hesitate to invite his colleagues to fight to the end.

“Every battle is a ‘do-or-die’ situation, and the only thing that can defeat us is ourselves. We have won countless times, and we need to win this time as well.” he argued.

Binance had to get rid of the CEO of Binance US, Brian Schroder, and replaced him with someone of stature to face crypto regulators. In addition to Norman Reed, a former SEC executive, CZ has also strengthened his legal team. Is it enough to guard against this imminent risk of collapse orchestrated by the U.S. government?

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Mikaia A. avatar
Mikaia A.

La révolution blockchain et crypto est en marche ! Et le jour où les impacts se feront ressentir sur l’économie la plus vulnérable de ce Monde, contre toute espérance, je dirai que j’y étais pour quelque chose

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.