US regulators have a new target on their radar: Binance. The Commodity Futures Trading Commission (CFTC) has sued the world’s leading cryptocurrency exchange over trading volume for regulatory violations.. Accusations range from insider trading to hiding offices around the world to evade supervision by authorities.
Binance denies the allegations, suggesting that another court battle between crypto companies and US regulators is just around the corner. On another front, Binance’s US subsidiary must wait to close its $1 billion deal for Voyager Digital’s assets until the Justice Department decides whether to appeal Voyager’s bankruptcy plan.
Beyond the courts, signs loom on the horizon that the crypto winter is waning. Billionaire Mike Novogratz’s Galaxy Digital turned a profit on a $1 billion loss in 2022. Meanwhile, China continues to develop its fintech industry, with a strong emphasis on blockchain.
This week’s Crypto Biz looks at how Binance is dealing with ongoing Fear, Uncertainty and Doubt (FUD) about its business, and how companies are navigating the opportunities and challenges of Web3.
Binance CEO CZ Rejects Market Manipulation Allegations
Binance CEO Changpeng “CZ” Zhao has rejected the allegations of market manipulation in response to a CFTC lawsuit, labeling it “an incomplete recitation of the facts.” According to Zhao, Binance “trades” in various situations, primarily to convert its cryptocurrency income to cover expenses in fiat or other cryptocurrencies.. The exchange CEO also acknowledged that he has two personal accounts on Binance: one for Binance Card and one for cryptocurrency holdings. “I eat our own dog food and store my crypto on Binance.com. I also need to convert crypto from time to time to pay for my personal expenses or for the Card,” he added. Zhao said that Binance has a 90-day no-trading rule for its staff and refuted claims that they engage in insider trading.
My Response to the CFTC Complaint | Binance Blog https://t.co/TadyotM7HN
— CZ Binance (@cz_binance) March 27, 2023
Galaxy Digital profits after $1 billion net loss in 2022
Galaxy Digital, the digital asset investment firm founded by billionaire Mike Novogratz, has turned to profit after a net loss of $1 billion in 2022, with preliminary pre-tax income of $150 million from January 1, 2023 to March 24, 2023, according to the company. Novogratz claims that the results are due to strategic moves taken “opportunistically” over the past few months and the recovery of the Bitcoin (BTC) price. Like other companies operating in the cryptocurrency space, Galaxy found 2022 a difficult year. In August, it abandoned plans to go public in the United States after ending a $100 million deal to acquire digital asset custodian BitGo. Later in November, the firm disclosed a $77 million exposure to failing cryptocurrency exchange FTX, with $48 million likely locked in withdrawals.
Disney dispenses with its metaverse division
The metaverse is on its way out, at least for Disney. A restructuring plan designed to cut operating expenses by $5.5 billion and lay off 7,000 employees in two months has led the entertainment giant to divest its metaverse division.. No new employment contracts will be offered to the fifty-odd members of the metaverse division, except for Michael White, who ran the broader consumer products unit. The unfavorable economic conditions and the increase in competition in the streaming sector have been two of the main factors that have led to the decision. Bob Chapek and Robert Iger, former and current CEOs of Disney, once viewed the metaverse as an upside investment opportunity.
Disney has abandoned a plan to develop its own membership program like Amazon Prime, according to @RWhelanWSJ.
Disney has also eliminated the division that was developing metaverse strategies, according to the report. https://t.co/mSm92XtqE0 pic.twitter.com/e2KqbxAC8i
—Scott Gustin (@ScottGustin) March 28, 2023
Disney has abandoned a plan to develop its own membership program like Amazon Prime, according to @RWhelanWSJ.
Disney has also eliminated the division that developed metaverse strategies, according to the report.
China to update national blockchain standards by 2025
Despite China’s stance on cryptocurrencies, the country’s authorities have been actively developing its fintech industry, with a strong focus on blockchain technology. The Ministry of Industry and Information Technology, the watchdog for China’s fintech industry, has announced its plan to improve development standards for blockchain technology by 2025. The ministry has published a draft of its guidelines and invites public input on blockchain development from “all walks of life.” This move aligns with China’s five-year plan for “National Economic and Social Development and Vision 2035,” in which blockchain is listed as a goal to “grow stronger.”
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