• Binance, the largest crypto exchange, is reportedly considering ending relationships with U.S.-based business partners due to tightening regulations by the Securities Exchange Commission (SEC).
• SEC alleged that BUSD, a stablecoin pegged to the US dollar, is a security and sued crypto firm Paxos.
• Binance CEO Changpeng Zao denied allegations of moving $400 million from a “secret” account paired with Binance.US to his own trading firm Merit Peak.
Tightening Regulatory Policies
According to a Bloomberg report, crypto exchange Binance is considering ending relationships with U.S. business partners due to tightening regulatory policies by the Securities Exchange Commission (SEC). The SEC has recently alleged that BUSD, a stablecoin pegged to the US dollar, is a security and sued crypto firm Paxos. This has caused concern and uncertainty among exchanges operating in the U.S..
Binance’s Response
Binance CEO Changpeng Zao (CZ) denied the allegations in a Twitter post saying they are false. In addition, he said that Binance was reassessing investments in the United States as it does not have licenses to operate in the jurisdiction but has been conducting business through its subsidiary Binance.US.
Allegations Against CZ
Binance’s CEO has been embroiled in controversy lately after Reuters reported that $400million had been moved from a “secret” account paired with its subsidiary Binance.US to his own trading firm Merit Peak based in British Virgin Islands which invested over $1million into Binance’s US subsidiary at the time of transfer . A spokesperson for Biance told Reuters that Merit Peak was neither trading nor providing services on their platform and only employees of their US subsiduary had access to it .
Crypto Market Volatility
The intense scrutiny from regulators combined with this volatile market climate has created many questions and uncertainties among crypto investors as we enter Q1 2021 despite seeing signs of Crypto Bull Run beginning to take shape .
Conclusion
Given these events surrounding cryptocurrency exchanges and their relationship with U.S regulatory bodies , investors should be aware of potential risks before investing into cryptocurrency assets under current market conditions .
