In the most recent installment of The Market Report, Marcel Pechman, an analyst and author, talks about the repercussions of the U.S. Securities and Exchange Commission’s suit against Binance exchange.
Most likely, the population of the United States will not be allowed to use the international version of Binance, and those who choose to use VPN services could be subject to prosecution. It is Pechman’s opinion that Changpeng “CZ” Zhao and Binance will reach an agreement to plead guilty, pay a penalty, and be compelled to cease operations for North American entities, including Paxos and the Binance USD (BUSD) stablecoin.
Given that Binance is the top spot and derivatives trading platform, the 5% price correction on April 5 could be seen as a “vote of confidence” that traders are confident Binance international will continue to operate without interruption. In the worst case scenario, Binance may face a hefty fine, but operations will not be affected and all customers will be fully compensated, similar to the BitMEX resolution.
Regarding the 10 tokens that the SEC has designated as securities, North Americans are not prevented from purchasing or possessing these altcoins, however, if they wish to trade them, an additional step is required – such as through a decentralized exchange.
Pechman believes that the lawsuit against Coinbase is distinct from Binance’s, since the publicly-traded firm has a large number of customers in North America and would suffer a significant drop in its user base and trading activity if it relocated overseas. Additionally, Binance faces other problems, such as the money transfers between related entities and the potential misuse of customers’ funds.
The initial analysis of Coinbase suggests that it is highly unlikely to experience any further significant developments, whereas the chances of Binance and CZ being investigated by the Department of Justice and potentially facing criminal charges are much higher.
Pechman emphasizes that if the U.S. Federal Reserve continues to print trillions of dollars to maintain the economy, investors will search for rare assets, thus a crypto surge will occur regardless of whether Coinbase and Binance are involved in the process.
Lastly, the program examines if the Bitcoin rate will hit the $24,000 mark again, taking into account that the long/short ratio achieved heights not seen in over a year. The show is broadcasted every Tuesday on the Cointelegraph Markets & Research YouTube channel.
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