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Frank Holmes

Crypto SWOT: SEC has accused Binance and its CEO of mishandling customer funds

Kitco Commentaries | Opinions, Ideas and Markets Talk

Featuring views and opinions written by market professionals, not staff journalists.

Commentaries & Views

Strengths

  • Out of all cryptocurrencies monitored by CoinMarketCap, Terra Classic performed best over the past week with a 16.15% increase.

  • Digital asset firm BitGo Holdings announced an agreement to acquire the parent company of Prime Trust, a crypto custodian for the Binance.U.S. trading platform, according to Bloomberg.

  • Despite the recent filings by the U.S. SEC alleging certain tokens as securities, the value locked on DeFi applications operating on those tokens' blockchains has remained mostly stable, as reported by Bloomberg.

Weaknesses

  • Among the cryptocurrencies tracked by CoinMarketCap, Sui was the worst performer of the week, declining by 20.61%.

  • Bloomberg reported that the SEC has accused Binance and its CEO CZ of mishandling customer funds, misleading investors and regulators, and violating securities rules. The allegations were detailed in a 136-page complaint filed on Monday in a U.S. federal court in Washington.

  • Liquidity on one of the most prominent crypto exchanges, Binance.US, has declined following significant regulatory actions by U.S. officials. According to data reported by Kaiko via Bloomberg, the Bitcoin bid-ask spread on Binance.US has dramatically worsened.

Opportunities

  • Bloomberg reported that Hivemind Capital Partners, a digital-asset investment firm founded by former Citigroup executive Matt Zhang, is launching a $300 million fund to invest in crypto tokens. This move is happening despite a U.S. regulatory crackdown that has dampened investor sentiment in the sector.

  • New York's Metropolitan Museum of Art has agreed to return $550,000 in donations it received from FTX shortly before the crypto exchange's collapse in November, according to Bloomberg.

  • The Ethereum blockchain’s daily average gas fee is approaching a two-month low after last month’s memecoin trading frenzy caused a surge in costs, as reported by Bloomberg.

Threats

  • Reginald Fowler, a former minority owner of the NFL’s Minnesota Vikings, has been sentenced to over six years in prison, ordered to forfeit $740 million, and pay $53 million in restitution after admitting he helped cryptocurrency exchanges evade money-laundering rules, according to Bloomberg.

  • The SEC has filed a lawsuit against Coinbase Global in a New York federal court, alleging that the crypto firm violated its rules for years. The regulator claimed in a 101-page complaint that Coinbase evaded regulations by allowing users to trade multiple crypto tokens that were actually unregistered securities, as reported by Bloomberg.

  • Cryptocurrencies experienced a broad decline after the US SEC accused Binance Holdings of mishandling funds and deceiving regulators, according to Bloomberg.

By

Frank E. Holmes

Contributing to kitco.com

Contact fholmes@usfunds.com
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.