- Binance.US chief risk officer and head of legal design have stepped down a day after CEO Brian Shroder resigned.
- The exits come as the exchange faces intense regulatory pressure.
- With the series of exits from the trading platform, investors anticipate negative news coming, probably as bad as Binance.US going bust.
Binance.US, the subsidiary of Binance.com in the US, has made headlines two consecutive days for the wrong reasons. This has inspired speculation of possible trouble in paradise that could ultimately blow up in the face of community members.
Also Read: Binance Coin price at risk as FUD surrounding a Binance collapse intensifies.
Binance loses three top executives in two days
Barely a day after Brian Shroder stepped down as Binance.US CEO, two top executives have exited the trading platform, leaving a lot of unanswered questions about what could be happening in Changpeng Zhao's crypto empire.
JUST IN: Binance US chief risk officer & head of legal resign.
— Watcher.Guru (@WatcherGuru) September 14, 2023
According to a report on Bloomberg, Binance.US's head of legal, Krishna Juvvadi, and the chief risk officer, Sidney Majalya, have exited the company as the Binance ecosystem faces regulatory clampdown from key agencies.
As reported, Shroder's resignation was attributed to "declining business and broader market uncertainties." This adds to the series of layoffs that CZ's empire has recorded in 2023 as it navigates regulatory pressure.
It started earlier in the year when the US Securities and Exchange Commission (SEC) came after Binance and its CEO Changpeng Zhao on allegations of "operating an illegal trading platform in the US." Notably, Juvvadi was in the frontline as the SEC's contact person, considering his role as head of legal.
Meanwhile, the successive exits have inspired fear, uncertainty, and doubt (FUD), with speculation that more could be happening within the trading firm than they are letting on.
Lot of resignations from Binance lately, some black swan news coming?
— FSTrades (@FSTrades) September 14, 2023
Despite the distinct lines between Binance.com and Binance.US, their issues tend to overlap and affect their individual businesses. For instance, regulatory clampdown against Binance and its CEO saw the US subsidiary lose a significant share of its user base as well as its trading volume, from billions of Dollars to the current valuation of less than $500 million. Subsequently, its ability to offer users an avenue to buy using USD was rescinded, causing users to exit the platform.
BlockTower Capital founder Ari Paul shed light on the possible impact of a Binance bust on the market, saying that it could "range from a minimal effect to an FTX-like scenario." Using Bitme and FTX exchanges to make his point, Paul highlighted the regulatory issues that these firms had to endure, noting that while Bitmex did not see any of its assets frozen despite the charges and with minimal market impact, FTX did not enjoy the same fate. On the FTX camp, the exchange collapsed, sending a lot of money down the drain while its native token, FTT, crashed. In his words:
When billions of dollars of wealth in the crypto industry are destroyed, that affects everything. The losses generated by GBTC flowed through to 3AC, Genesis, and even Gemini customers who thought they were harvesting yield in a savings account.
According to Paul, a similar fate could befall the market if the Binance debacle leads to confiscation of funds. This explains why the US Department of Justice decided to tread lightly when it was considering fraud charges against Binance but worried about how it could affect the market.
Bitcoin, altcoins, stablecoins FAQs
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
What are altcoins?
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
What are stablecoins?
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
What is Bitcoin Dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
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