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The jokes are over: Targeted actions against Binance show a clear intention to take cryptocurrency to the hands. What can happen and what will be the consequences?
FTX bankruptcy and its consequences turned out to be few, To discredit cryptocurrency industry, despite a lot of apocalyptic forecasts. For a month, the market has recovered and even tried to outline the tendency to grow. But the events of the last week show, that the mysterious enemy is not going to dwell on the achieved.
It is difficult not to notice the beginning of a targeted campaign against Binance - the largest ecosystem of the cryptocurrency market. Hundreds of billions of dollars apply monthly in it, And the reserves of the exchange itself exceed the value of the assets of many corporations. And at the same time, Binance has still been able to stay in the "gray zone", giving at least retail customers the opportunity to maintain anonymity, and without transmitting information to the regulators. Of course, This could not last forever.
The right moment to destroy cryptocurrencies
Events 2022 years have already shown the collapse of many global market mechanisms. Even the illusion of a “free market” no longer exists, and international business is forced to maneuver between the preservation of profit and the observance of many sanctions and other restrictions.
Blocking of assets, Trade restrictions and manual price regulation are already becoming generally accepted practice. Such a level of confrontation at a global level did not exist since the Second World War.
Geopolitical games have led to an increase in inflation around the world. AND, Despite the optimistic statements of officials, Central banks continue to increase rates, And the stock markets continue to decline. It means, that the government, and large market players do not hope for quick recovery. Until recently, cryptocurrencies could still be considered as a relatively “quiet harbor”. But this situation ceased to arrange those, who is hiding behind the "invisible hand of the market".
The growth of investment attractiveness of cryptocurrencies amid the depreciation of fiat money will cause large capital flowing into them, And touching them will simply be dangerous. The most suitable time is coming now, To eliminate or at least significantly weaken too independent competitor for nascent state cryptocurrencies (CBDC). Public opinion has already been sufficiently prepared by the information campaign around the collapse of FTX and Terra, And enough a small push in the right direction.
This year all markets are in unstable balance, But cryptocurrency is most vulnerable. It is least regulated, and liquidity during the "cryptosim" fell many times compared to last year. Besides, Cryptocurrency traders are accustomed to prices, fraud and closing projects, So they are easier to get out of balance and make you hit panic.
Three Keiths of the Cryptocurrency Market
There are many large companies and decentralized projects with billions of dollars in the cryptocurrency industry in the cryptocurrency industry. But the basis of its stability for investors is three large exchanges, part -time operators of the three largest stablecoins. It is they who provide the main “bridge” between crypto and fiat currencies, Liquidity on decentralized exchanges and the possibility of direct work with cryptocurrencies for large players from traditional finance.
It is easy to guess, What is Bitfinex/Tether (USDT), Coinbase/Circle (USDC operator) uchinance (Operator Busd). In total, these three crypto corporations are kept only in providing stablecoins more $130 billion, And together with other own funds and customer deposits, they control up to a quarter of trillion dollars. This is almost 30% "Paper" capitalization of the cryptocurrency market. But unlike virtual capitalization, obtained from the cost of all released coins, All funds on exchanges are “living” money and other liquid assets.
The collapse of any of these three whales will cause a powerful blow to the cryptocurrency industry, from which she will recover for many years. It's not so much a direct loss, how much in reputation damage. Institutional investors - banks, Investment and pension funds, Large asset managers - will assign the most risky ratings to cryptocurrencies and throw them out of investment portfolios. Bitcoin is higher $10 000 again will become a dream of ciphylards, and for millions of bankrupt small players, cryptocurrencies will become synonymous with pyramid schemes and fraud. Restoring a destroyed reputation is much more difficult, how to earn it from scratch.
Crushing any of the cryptocurrency whales is not so easy, how to bankrupt the “paper” FTX with artificial capitalization from their own tokens. Their main capital are in completely reliable "cubes", placed in traditional financial assets, not subject to sharp jumps in prices. Therefore, in the absence of the possibility of direct and quick collapse, the tactics of staggering work well - first of all, methods of information war, who cost almost nothing, but often more effective than gross force. It was such a campaign that began against Binance.
Why are Binance attack
Why was Binance chosen by the victim? Of the three Bitfinex is legally most vulnerable, it is an offshore company with a fairly dark past. But after hacking 2016 year she became a niche player rather. Its turnover and client base are smaller, There is practically no its own ecosystem, And most of the own assets are in providing Stablecoin USDT (Today $66 billion). In this way, It is more difficult to bankrupt it, And the information and political effect will be less.
Coinbase же, against, originally positioned as a "white" exchange. This is a public company, American market. It is registered with the SEC, traded on the US stock market, publishes full reports, transfers customer data to the Tax Service and complies with all sanctions. In this way, Coinbase will only benefit from the crash of competitors and help regulators in increasing control over the cryptocurrency market.
Binance is the perfect victim. She has the largest turns, The largest community and at the same time there are a lot of friction with regulators of different countries due to "gray" politics and partial refusal to comply with sanctions. Therefore, the exchange has to sit at once on many chairs, Many rumors roam around it and finding violations is much easier. BINANCE reserves in providing BUSD are minimal from the "Big Three" - now "only" $18 billion.
The thickening clouds could not be ignored. Binance has previously done a lot, To strengthen your position. The first logical step was the separation of the market: The most risky American market in the point of view of regulation was allocated to a separate company Binance.us, working with a number of restrictions, And on Binance Global, access was closed to customers from the USA and a number of other countries. At the end of November, the same maneuver was held in Japan.
Besides, former employees of regulatory authorities were hired and the legal unit was significantly expanded. However, Other cryptocurrency projects went along this path, which even caused the concern of American senators. However, among the public persons in Binance, losses began: 20 December the exchange left Joe Johnson (Jo Johnson), Brother of the ex-Prime Minister of Great Britain.
In recent months, the exchange has sought to publicly prove its financial stability. International audit company Mazars held an external audit, And Binance itself has developed a mechanism for evidence of the presence of cryptocurrency reserves-Proof-OF-RESERVES (By). But the technology has not yet been finalized and has not managed to gain the trust of investors, And for regulators, in any case, it will not have legal force.
At the end of November, Binance became the main initiator of the creation of the “restoration” Fund for the industry and immediately transferred it to it 1 billion BUSD. And the final touch - yesterday Binance joined the US Chamber of Digital Commerce, lobbying for the interests of the cryptocurrency business. However, nothing is known about the real achievements of this organization.
Information War against Binance
The first direct action of the information campaign against Binance was Reuters, According to which the US Ministry of Justice has been investigating for several years. However, the Ministry “cannot decide” with specific charges against the exchange, for which the tail from the "many violations" of American legislation has long been drawn for a long time. No official charges against Binance have been put forward, And the information comes from "anonymous sources in the Ministry of Justice".
Besides, 12 December announced the arrest on the Bagams of the founder of FTX Sam Bankman-Frida. He was not touched for more than a month, But the day after the arrest, the New York prosecutor's office with the support of CFTC and SEC already charged him. Now the disgraced creator of a ruined exchange threatens to 115 Years of prison. Very operational work. There was no such precedent in the cryptocurrency industry after the conviction of Silk Road creator Ross Ulbricht, serving two and a half life sentences. Even such an obvious fraudster, as founder of Onecoin, stole about $4 billion, can "get off" 60 years of imprisonment. And the owner of MtGOX Mark Karpeles, served about three years, has been free for a long time.
Sam Bankman-Fried was really talented in terms of attracting investments, And many cryptocurrency companies and venture funds directly or indirectly invested in his exchange. Therefore, the collapse of FTX, not incurred critical losses, financially and psychologically affected almost everyone, involved in cryptocurrencies. Many old cryptoquartics woke up and, Pinay corpse ftx, They did not fail to once again call cryptocurrencies fraud and predict their complete collapse. In general, this created a negative background around the entire industry. And the regulators received every reason to strengthen and deepen the "investigation".
The next day, 13 December, A strange restriction of transactions with USDC stabilcoin followed. Stablecoin belongs to Coinbase - an adjustable American company and part -time one of the main competitors of Binance. Technically, the restriction was allegedly caused by “closed banks” in the United States, although still nothing like this has been observed. It did not cause serious inconvenience to the traders, but even more enhanced the negative information background.
The turnover in USDC on Binance is less, than in other basic stablecoins, And you can enter and withdraw money into USDT or Busd without additional expenses. Why suddenly a huge number of requests for the output of the USDC suddenly appeared, and at the most inappropriate moment for this? This restriction and his unexpected announcement made traders even more nervous and aroused suspicions. After all, the collapse of projects most often began with the restrictions of the withdrawal on some tools, and then their number gradually expanded.
Panic injection was fruit. Immediately after these negative news, information appeared, that Binance clients actively display bitcoins, to 30 000 BTC per day, And the next day - even more panic messages about that, that the exchange is rapidly losing deposits in the main cryptocurrencies and stablecoins. In just two days from the exchange, it could be brought out before $3 billion. At the end of the week this figure, probably, It has grown more. There may be comparable conclusions in fiat currencies, but they cannot be tracked just as simple.
At the same time 14 December sharply, Immediately on $3 billion, uptake capitalization stibel Busd. It is at the same time bad, And a good sign. On the one side, Binance really faced a liquidity crisis and was forced to use her main “cube”. Good news is, that the exchange works honestly and really derives tokens from the turnover, The remaining without security. And there are enough of these funds, Whereas a month earlier, a smaller panic completely ruined ftx. Further changes in the capitalization of BUSD can give additional information about the state of affairs on Binance.
Pupped oil to the fire and popular American TV presenter Kevin O’Liri, invited to perform in the US Congress in the FTX case. He accused Binance of dishonest competition, "FTX murder" and attempts to monopolization of the market. At the same time, O’liri himself does not deny, what I previously received from FTX $15 Milln for promoting the exchange in its show.
Audit ghost
But the most interesting part of the story was played with the audit of Binance reserves, conducted by the audit company Mazars. This is a well-known accounting and audit company with headquarters in Paris, The existing almost 80 years old. Although it does not belong to the "big four", Nevertheless, she has a fairly extensive experience of audit, consulting and other business services, to give out an authoritative conclusion.
After the conclusion of the contract 1 December Mazars for a week an audit of Binance reserves, confirming the presence of the exchange 582 485 BTC, What's on 1% exceeded client funds, Moreover, excluding the own reserves of the exchange. The Mazars conclusion was received positively, despite some attacks from skeptics, By the way, previously involved with US regulators. In a few more days, 15 December, Independent analytical platform Cryptoquant confirmed the relevance of the Mazars report.
And suddenly 17 December Mazars unexpectedly removed the results of the Binance audit from her site and defiantly refused to cooperate with other cryptocurrency companies, Including Crypto.com and Kucoin. Such actions are difficult to explain, After all, Mazars primarily damaged their reputation. It was unlikely that this could have happened without strong external pressure, And we are unlikely to ever find out, What prompted the company's management for actions, inexplicable in terms of business and ethics.
On the same day, Binance said, that she turned to representatives of the "Big Four" of international audit firms to conduct an audit, But none of them wanted to cooperate.
After all this, it is hardly surprised to be surprised at the nervous performance of Chanpan Zhao, of which he accuses Kevin O’liri of a direct lies, And the auditors of the "big four" in a misunderstanding of the work of the cryptocurrency market. Zhao is already beginning to understand, what his exchange took up seriously, and the counteraction of such a powerful pressure he has a little.
BINANCE has already lost its deposits for billions. In the near future, this leads to a decline in revolutions, and that means profit, and influence. Even if the exchange manages to resist, It will be very difficult for her to maintain the position of the largest market player. But US regulators still have not taken real actions, Only struggling with a finger through the press.
To whom the fall of Binance is beneficial
To understand, what's happening, First of all, you need to determine, who is most interested in the negative development of events. Given that, that almost all verbal Binance attacks take place in the United States, You can assume, that the whole campaign is conceived in circles of the American financial oligarchy, Regardless of their party affiliation. And some functionaries of the Democratic Party are directly interested in that, to hush up the scandal with FTX or overshadow it with something more significant. Direct actions in such cases are traditionally not taken, but the levers in the press and regulatory departments are widely used.
But the campaign against Binance is not an end in itself, and the most convenient tool for weakening the positions of cryptocurrencies in general. Verbal attacks continue to the entire cryptocurrency industry. Senator from the Democratic Party and the chairman of the banking committee Sherrod Brown called for completely banning cryptocurrencies, Since they "threaten the national security" of the USA. And the current chairman of the SEC Gary Gensler said, that the cryptocurrency market should be transparent and regulated similarly to the securities market. It means, that cryptocurrency companies will have to transfer information about deposits and operations of their customers to the regulator, as well as periodically publish financial statements.
There are more modest interests. Of the three whales of the cryptocurrency market, only Coinbase from the very beginning works in the United States and is very loyal to the requirements of the regulators. In the American and European markets, she no longer has equal rivals. Now she has a chance to take a Binance place and significantly strengthen the position in the international market as the most reliable regulated platform. While continuing to report on customer operations where it should.
Binance collapse consequences for market
May be, The moment of truth predicted by cryptoanarchists is nearing, when the confrontation between centralized and decentralized currencies will go to the stage of open conflict? And the attack on Binance is one of the first strokes in this war?
У Binance, Like any major project, Enough ill -wishers. These are not only competitors and regulators, but also unsuccessful traders, Creators of projects and tokens, who failed to agree with the exchange, Opponents of cryptocurrencies in general, BNB shorts and many other categories. But most of these sensations do not think about the future and about, that the collapse of Binance can hit them. A sharp drop in cryptocurrencies will cause an unprecedented liquidity crisis still. Even the most desperate short sellers risk being left with millions in paper profits, but without real money.
As was already said at the beginning of the article, Binance is one of the system -forming players of the cryptocurrency industry. The stock exchange also belongs to stabblecoin of the first three, and one of the largest blockchains, on which hundreds of projects work. Operations of many large companies in the industry and abroad are tied to it. Therefore, the consequences of the collapse of Binance will significantly enhance the wave, already launched by bankruptcy Terra and FTX. Moreover, Uncontrolled collapse of the entire cryptocurrency infrastructure may begin, built over the past ten years.
What will happen if Binance bankruptcy declares?
The first and most obvious - all Binance customer assets will be frozen for an indefinite period, Even if on the day of the announcement they will be enough to fully cover payments. And this is tens of billions of dollars. But the very next day they can cost several times less. After all, the cryptocurrency exchange holds most of the assets in cryptocurrencies and tokens, And their collapse is inevitable.
Busd liquidity will immediately fall to zero, Even if they are fully provided, And the assets themselves will most likely also be frozen until the end of the process. Its duration can be judged by the MTGOX case, almost nine years old. The lack of liquidity will cover most centralized and decentralized exchanges, Many of them will be forced to limit the operation operations, that only a panic will spur.
The price of BNB and the vast majority of tokens on BNB Chain will fall in a matter of hours. And then the fall will inevitably captivate the entire market. The general drawdown will be more frequently, than after the declaration of bankruptcy FTX. Traders rush to sell cryptocurrencies and withdraw money from all exchanges, Many of them will not stand such a storm. The commissions will also take off on decentralized exchanges, especially working on BNB Chain. Lose stability algorithmic stablecoins.
The bankruptcy chain can lead to the domino effect and destroy even reliable projects, storing funds in BTC, Eth and stibel. Mining will become unprofitable for a long time, And steakers will have to write off “paper” losses or sell coins at low prices.
Cryptocurrency projects in traditional markets will receive even greater damage. Shares of many cryptocurrency companies and funds are already trading with a significant discount, A new wave of sales can force their operators to eliminate and leave traditional exchanges. Only Grayscale shares will lose billions. Cryptocurrency futures contracts and ETFs on CME and other stock exchanges will collapse. It is quite possible, that operators will refuse to extend and open new contracts. In this way, the cryptocurrency industry will be thrown back into 2016 year.
Political consequences are also inevitable.. Thousands of complaints will pour in from “offended” investors, general inspections of all companies will begin, in any way involved in cryptocurrencies. And at least part of them will inevitably identify, that everything is not all right. This means a new wave of public processes, fines, bankruptcy and a new drop in cryptocurrency courses.
After such complete evidence of insolvency, the regulators will be completely untied hands. Cryptocurrency companies will be even more regulated, And all operations with cryptocurrencies will be tightly controlled. In this way, Against their background, state digital currencies will seem more reliable, quick and safe tool. Perhaps this is precisely the strategic goal of the entire campaign against cryptocurrencies?
But so far all this has not happened yet, Each cryptocurrency investor should think, Do I need to help rock the boat with your own hands.