I Used To Hate Binance
Binance, a centralized cryptocurrency exchange, has been featured heavily in the crypto space as of late. Its founder, Changpeng Zhao (known as "CZ"), has made headlines, notably with a tweet that reverberated worldwide prior to the FTX crisis.
When I was a newcomer to crypto, examining transactions on Etherscan without fully understanding the concept of an exchange, Binance was a name that surfaced frequently. At that time, I recall feeling frustrated with Binance, exacerbated by others who seemed to scapegoat the platform for all crypto-related issues. It was common practice for many to use Binance as an easy off-ramp to liquidate their assets, and those blaming the platform seemed to be attempting to gaslight me.
However, my perspective has evolved over time, and I've developed a respect for CZ and Binance, as well as other industry figures like Erik Voorhees of ShapeShift, and Jesse Powell of Kraken. My initial perception was that these exchanges functioned similarly to traditional banks — riddled with corruption and condescension. This, however, is far from the truth. These pioneers in the crypto space, in general, prioritize the interests of the masses over a select few, contrary to popular belief.
On June 5th, 2023, Binance came under scrutiny by the SEC, accused of deceiving regulators and investors about its operations, resulting in 13 filed charges. The series of events was succinctly summarized by Wu Blockchain on Twitter.
An interesting aspect of these charges is the claim that a large number of tokens in circulation are securities, despite no explicit legal grounding. This assertion has been a significant point of contention in the crypto industry, with ongoing debates about the regulatory framework surrounding the tokens exchanged across diverse networks. The seemingly arbitrary nature of these guidelines, led by Gary Gensler, Chair of the U.S. Securities and Exchange Commission, has caused unrest within the growing crypto community. However, the resilience of CZ and Binance suggests they are far from conceding.
Several prominent industry figures have expressed their support. Jack Dorsey, former CEO and founder of Twitter, commented, "Steady lads," while Erik Voorhees, a veteran in the Bitcoin community, also voiced his solidarity.
This display of unity within the crypto community is heartening. Despite continuous shifts in regulations, entities that have been in the industry for over a decade strive to comply. However, it feels unjust when companies are sued for selling securities that have not been officially classified as such. The situation becomes even more absurd when the person setting the rules seems ill-equipped to do so, as exemplified by this video.
The outcome of the Binance case will be one to keep an eye on. Then again, if the ongoing Ripple lawsuit is any indication of the timeline, the crypto community may have migrated out of the United States before any resolution is reached.
Cheers,
Ling