In the past, that’s largely applied to “zombie assets,” or coins and tokens that have been delisted and are still sitting in someone’s account.īut for Allegrante, the terms of service raises some red flags. It also reserves the right to freeze user accounts or, under certain circumstances, convert any digital asset on their platform to another.
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Therein lies one of the main concerns: What would happen if the platform suddenly shut down and all those funds were frozen? Or, what would happen if authorities ordered the company to freeze withdrawals, like Bahamas regulators did with FTX.īinance would say that it faces no such threat, but Allegrante also pointed out that concerned users have scrutinized Binance’s terms of service, which the company recently updated on June 16, 2023.Īccording to its current user agreement, the company reserves full right to modify unilaterally -without notice to customers -its terms. Nearly a quarter of those assets, roughly $15 billion worth, are Binance Coin ( BNB) Tether ( USDT) makes up another $15 billion Bitcoin ( BTC) accounts for $11 billion Ethereum ( ETH) approximately $9 billion and a variety of stablecoins and other cryptocurrencies make up the remainder. What’s more, the market capitalization of all assets on Binance adds up to a whopping $65 billion, according to GeckoTerminal. At one point, more than 90% of Bitcoin trading happened on the platform, according to Arcane Research. Its two closest competitors, Coinbase and OKX, hold a mere 6% and 5% of the monthly spot trading volume. That means Binance accounts for 42% of all spot and 56% of all derivatives trading, according to the report. According to a recent CCData report, Binance processed $239 billion in spot and $1.2 trillion in derivatives trading volume in June. Say what you want about the crypto exchange, but it is big. That could cascade into user funds being frozen–whether by the company or authorities -and Binance would likely initiate bankruptcy processes, as we have seen in previous situations. These charges levied could force the company to close or pause its operations. The countries on this list, due to their size and economic importance, could indirectly put pressure on regulators in other nations to begin similar legal actions. The charges range from offering unregulated securities, aggravated money laundering, failure to acquire a VASP license, and operating an alleged pyramid scheme, among others. “It’s incredibly important to remember that there is a real problem in the short term,” said Jason Allegrante, chief legal & compliance officer for Fireblocks, a digital asset security platform, when asked whether Binance is too big to fail.Īlthough he is rooting for Binance “for the sake of the industry,” Allegrante told Decrypt he thinks “we need to be aware and encourage people to understand the problem and encourage new companies to enter and create a competitive environment.”īinance is currently facing heightened regulatory scrutiny in the United States, Germany, France, the Netherlands, and the United Kingdom. But is Binance different? Could it be the one that puts a permanent dent in the industry if it crumbles? Things got bleak, but crypto kept on chugging.
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