Following the collapse of FTX, the largest exchange, Binance, first seemed to control the cryptocurrency market. However, less than a year later, Binance finds itself in a risky scenario. Binance's hegemony is shaking in the face of the possibility of regulatory actions by US authorities. The exchange has laid off a total of 1,500 workers over the past three months in an effort to slash expenses and prepare for a slump in business. Over a dozen senior executives have left the company during that time, The Wall Street Journal reported.
Kaiko, a source of cryptocurrency market data, reports that, down from about 70 per cent at the start of the year, Binance currently handles about half of cryptocurrency exchanges involving direct purchases and sales. Due to its huge size, Binance's future has significant ramifications for the cryptocurrency sector. While experts in the field believe that other exchanges might step in to take Binance's place if it collapses, there is concern that, in the near term, market liquidity may disappear, leading to a significant decrease in token prices.
One institutional trader revealed to The Wall Street Journal that their business had prepared backup plans to quickly withdraw funds from Binance in the case of an emergency. The co-founder and chief marketing officer of Binance, Yi He, highlighted his commitment to overcome these difficulties in a message to the company's workers last month. He emphasised that every struggle is a make-or-break moment and that the only real threat is one's own defeat.
Binance has a history of investing outside cryptocurrency initiatives, such as X (formerly known as Twitter). Binance's co-founder Changpeng Zhao, often known as CZ, is a well-known figure in the cryptocurrency community and has 8.6 million X followers.
Long-running investigation by the US Justice Department might result in Binance and Zhao being charged with crimes and paying hefty fines. The Securities and Exchange Commission (SEC) is suing Binance as well, claiming that it engaged in illegal activities in the US and misappropriated consumer funds. The business claims that consumer money is safe and that it is committed to compliance even if it acknowledges prior errors, the outlet reported.
Despite its global presence, Binance's accessibility has been restricted in many countries, including Europe, where more nations are banning its operations. In the US, Binance has witnessed a sharp fall in activity, with the recent departure of its CEO, legal chief, and risk head.
from NDTV News- Topstories https://ift.tt/4RYK8am
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