At the start of the year, Binance appeared like it could soon be king. This followed the collapse of its biggest competitor, FTX. One of FTX’s founders went to the head of Binance in hopes of financial aid, but such an arrangement seemed unlikely. FTX’s fate was sealed and collapsed not long after. This all left Binance in a supreme position in a market that is growing rapidly. Now, there may be worries about a Binance collapse.
However, being at the top also meant becoming a target. Combating regulators became Binance’s next goal. They have been attempting to clamp down on the crypto industry, ensuring it doesn’t destabilise traditional economic markets. If all went to plan, Binance could make itself seem the responsible crypto provider, promising a prosperous future for all crypto followers.
Such regulators have made a variety of accusations at Binance, saying it has been keeping hold of client assets and not upholding standards against money laundering. Some even proposed the existence of Binance scams.
SEC vs Binance
After success towards the end of 2022 and 2023, regulators really did start to squeeze the exchange. The SEC was against Binance’s plans to acquire the assets of Voyager, a cryptocurrency lender. Further ahead, a New York Financial department made sure to stop any issuance of Binance’s currency. The CFTC accused the exchange of illegally accessing customers in the US. They also began a lawsuit. They further said that some of their customers, including those abroad, used the currency for criminal purposes.
This onslaught of regulatory pressure has had a marked effect. Its share on the crypto spot market dropped to 40% from a height of 57% only this last February.
Part of the problem has been the relatively gung-ho attitude of the company up to now, which is finally catching up to them. While they were rising, there was an unfortunate lack of care in how they would direct the company. If all goes well, they may be able to survive these tough times and come out better on the other end, and they can avoid a Binance collapse. The Binance support for customers should hopefully improve.
