Sebastian Sinclair

The net worth of Binance CEO Changpeng Zhao fell more than $2 billion on Wednesday following revelations the CFTC is pursuing legal action against his exchange.



Zhao dropped seven placements from #46 at $27.9 billion to #51 at $25.8 billion, <a href="https://www.bloomberg.com/billionaires/profiles/changpeng-zhao/#xj4y7vzkg" target="_blank" rel="noreferrer noopener">according to</a> the Bloomberg Billionaire Index.



Even at current paper valuations, Zhao’s worth can purchase up to 13.2 million troy ounces of gold, and 330 million barrels of crude oil. That’s equivalent to 0.11% of the US’s total GDP, index data show.



Born in China, Zhao was later raised in Canada by his mother, a teacher, and his father, who received a job at the University of British Columbia as an academic.



To date, Zhao has seen more than 65% of his paper net total worth erased from a year ago, from $73.9 billion to current levels, Bloomberg data shows. The losses come after several industry-wide company failures in 2022 negatively impacted digital assets valuations and harmed investor interest.



The CEO’s fortune stems from his controlling interest in Binance, which is said to serve more than 120 million users worldwide and plays host to hundreds of cryptoassets. Zhao also owns Binance.US, which was previously valued at $4.7 billion in a funding round in March of last year.



<h2 class="wp-block-heading">“Unexpected and disappointing civil complaint”</h2>



The CFTC sued the exchange, Zhao and Binance’s former chief compliance officer, Samuel Lim, on Monday over allegations of trading and derivatives violations.



Zhao responded Monday, tweeting the number “4” in reference to a <a href="https://twitter.com/cz_binance/status/1610018096122851328?s=20" target="_blank" rel="noreferrer noopener">separate tweet</a> in January, meant to spur observers into ignoring “fake news” as well as fear, uncertainty and doubt.



In a <a href="https://www.binance.com/en/blog/from-cz/czs-response-to-the-cftc-complaint-2408916493005890282" target="_blank" rel="noreferrer noopener">blog post</a> on the same day, Zhao said the CFTC’s suit contains an “incomplete recitation of facts” before attempting to address several issues in the complaint. 



The CEO pointed to Binance’s multiple industry licenses, its “transparency” with law enforcement and its KYC measures, intended to block US users by nationality — a subject the CFTC takes particular issue with.



Industry observers have painted a dim picture for the exchange, which they say would have a hard time defending those allegations in what is perceived as a “<a href="https://blockworks.co/news/reactions-to-cftc-lawsuit-binance">fatal blow</a>” to its operations.



It follows similar actions taken against crypto firms by regulators this month, including the SEC serving Coinbase a <a href="https://blockworks.co/news/sec-serves-coinbase-in-latest-alleged-crypto-securities-violation">Wells notice</a> as it intends to probe the exchange over allegations of securities violations.



But Dmitry Lapidus, of crypto-native investment fund Dragonfly, told Blockworks the drop in Zhao’s worth meant little more than an “ego hit.”



“When you’re the king, everyone comes at you right?” Lapidus said.



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Over $2B Wiped From Binance CEO’s Net Worth Thanks to CFTC Suit

Shalini Nagarajan

<a href="https://blockworks.co/tag/binance">Binance</a> reportedly conceived a plan to throw off US regulators after it became apparent that authorities there were cracking down on the industry.



A Binance spokesperson told Blockworks the exchange didn’t have adequate compliance and controls in place early in its history.



A Binance executive privately warned colleagues in a chat dated 2019 that any legal action from US regulators would be like a “nuclear fall out” for its business and top brass, The <a href="https://www.wsj.com/articles/texts-from-crypto-giant-binance-reveal-plan-to-elude-u-s-authorities-3a17ddeb?mod=markets_lead_pos1" target="_blank" rel="noreferrer noopener">Wall Street Journal</a> reported Sunday.



“Like virtually every other crypto exchange, we did not have proper KYC in place at launch. We did not move fast enough to catch up to the rapid speed by which the industry and technology grew,” the spokesperson told Blockworks.



Binance&#8217;s decision to launch <a href="https://blockworks.co/tag/binance-us">Binance.US</a>, as an independent US-centric arm that would make use of Binance’s brand and technology, the WSJ characterized as part of a move to evade US authorities and counteract potential prosecution, citing messages and documents from 2018 to 2020.



The Journal found that both platforms were more connected than they let on, sharing not just staff, but finances and an entity that traded cryptocurrencies. The report further indicated there may have been sharing of US customer data as Binance’s China-based developers also managed the software code for Binance.US users.



If US regulators determine that Binance has control over a US entity due to the interconnectedness of its business, its entire operations could come under their scrutiny, according to the report. It stated that the US securities regulator and the Justice Department have been investigating Binance’s relationship with Binance.US since at least 2020. 



Binance was already in a hot spot this week after three US senators including Elizabeth Warren asked the exchange for information regarding its relationship with Binance.US, know-your-customer checks and anti-money laundering compliance program.



Their <a href="https://www.warren.senate.gov/oversight/letters/warren-van-hollen-marshall-lead-bipartisan-call-for-crypto-exchange-binance-to-provide-transparency-about-potentially-illegal-business-practices" target="_blank" rel="noreferrer noopener">letter</a> noted that Binance CEO Changpeng Zhao called Binance.US a “fully independent” entity, but that in reality, he controls the company as a “de facto subsidiary” of Binance. 



“Mr. Zhao’s assertion that Binance.US is fully independent is eerily similar to claims Sam Bankman-Fried made regarding the distinction between FTX US and FTX – claims that appear to be false,” the senators said.



A Binance spokesperson said that when Binance.US was founded, an agreement was established with Binance.com’s tech team to build out the tech infrastructure and other forms of support for the US-regulated exchange.



“This kind of agreement was not unusual and, in fact, the founding team had previously licensed the tech stack to other non-Binance affiliated organizations as well. It was a white label service that supported other exchanges. That is why you’re seeing these old communications between members of the two organizations.”



The spokesperson added that Binance.com does not have any US customers today.



With US government agencies clearly circling the wagons, <a href="https://blockworks.co/news/us-business-with-binance">the question arises</a> again: Will anyone in the US be able to do business with Binance?



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Binance Moves to Fix Compliance May Not Placate US Regulators

Macauley Peterson

The New York Department of Financial Services (NYDFS) has directed Paxos to cease issuance of new BUSD tokens, effective Feb. 21.



“BUSD will remain fully supported by Paxos and redeemable to onboarded customers through at least February 2024,” Paxos said in <a href="https://paxos.com/2023/02/13/paxos-will-halt-minting-new-busd-tokens/">a statement</a>. “New and existing Paxos customers will be able to redeem their funds in US dollars or convert their BUSD tokens to Pax Dollar (USDP), a regulated US dollar-backed stablecoin also issued by Paxos Trust.”



The precise reason for the NYDFS direction was not given. Stablecoins issued by Paxos Trust under its own brand are unaffected, a spokesperson confirmed to Blockworks, but declined to comment further.



A <a href="https://www.dfs.ny.gov/consumers/alerts/Paxos_and_Binance" target="_blank" rel="noreferrer noopener">statement</a> by the NYDFS terms the direction &#8220;a result of several unresolved issues related to Paxos’ oversight of its relationship with Binance through Paxos-issued BUSD.&#8221; 



Paxos has managed the minting and redemption of BUSD under a brand license agreement with Binance <a href="https://paxos.com/busd-transparency/">since 2019</a>.



“When Binance sends us fiat, we create BUSD tokens and provide them to Binance. When Binance sends Paxos BUSD for redemption, Paxos burns the BUSD tokens and provides Binance USD in return,” Paxos’ spokesperson previously told Blockworks.



But Binance has also minted its own stablecoin IOU, which it labels BUSD, that are not directly connected to Paxos Trust, as noted in the firm&#8217;s BUSD <a href="https://paxos.com/busd/">frequently asked questions</a>.



“Binance independently mints Binance-Peg BUSD on other blockchains (e.g., BNB Chain, Polygon and Avalanche) and pegs the tokens to BUSD on a one-to-one basis,” the FAQ explains. “This allows holders of both tokens to swap tokens between Ethereum and other blockchains.”



Investors concerned over this dynamic previously sold off Binance Coin (<a href="https://blockworks.co/price/bnb">BNB</a>) holdings in December, following the disclosure that Binance’s <a href="https://blockworks.co/news/binance-market-share-bounces-back-bnb-price-consolidating">proof-of-reserves partner Mazars Group was ending</a> its own relationship with the exchange giant.



BNB is once again down sharply on the heels of the Paxos announcement, off about 8% in the past 12 hours.



Binance is reviewing its options in view of “ongoing regulatory uncertainty in certain markets,” a spokesperson told Blockworks, “to ensure our users are insulated from further undue harm.”



In the near term, the BUSD market cap can be expected to decrease, the Binance spokesperson said, noting that “Paxos also assured the funds are safe, and fully covered by reserves in their banks.”



Binance CEO Changpeng Zhao (CZ) tweeted Monday that he expects users will migrate to other stablecoins on Binance in due course.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">7/ Binance will continue to support BUSD for the foreseeable future. We do foresee users migrating to other stablecoins over time. And we will make product adjustments accordingly. eg, move away from using BUSD as the main pair for trading, etc.&mdash; CZ 🔶 Binance (@cz_binance) <a href="https://twitter.com/cz_binance/status/1625067495760560128?ref_src=twsrc%5Etfw">February 13, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Tether’s USDT and Circle’s USDC can be expected to be the main beneficiaries <a href="https://blockworks.co/news/tether-stablecoin-market-half">in terms of market share</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



This story was updated on Feb. 13, 2023, at 8:50 am ET, with a statement from the NYDFS.



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Paxos to Cease Minting New BUSD and End Relationship with Binance

Cryptocurrency exchange Binance is suspending US dollar transfers from Wednesday, but hasn’t given a reason for doing so.



“We are temporarily suspending USD bank transfers as of February 8th,” a spokesperson told Blockworks on Tuesday, adding that the exchange is upgrading its services. “Affected customers are being notified directly.”



Binance is working to restart services as soon as possible, but the spokesperson added, “only 0.01% of our monthly active users leverage USD bank transfers.” A current count of monthly active users was unavailable.



Meanwhile, all other methods of buying and selling crypto remain unaffected, the spokesperson said. This includes bank transfers using other fiat currencies supported by Binance (including euros), buying and selling crypto via credit and debit cards, Google Pay and Apple Pay and via Binance P2P marketplace.



Binance’s US arm said in a <a href="https://twitter.com/BinanceUShelp/status/1622653195225899025" target="_blank" rel="noreferrer noopener">tweet</a> that it’s not affected by the suspension, suggesting that only non-US customers who deposit or withdraw US dollars will be impacted.



The move comes after Binance said in January that its US banking partner Signature Bank would no longer handle SWIFT transactions <a href="https://blockworks.co/news/signature-bank-limit-on-swift-transactions-with-binance-affects-few-users">below $100,000</a> from Feb. 1. The lender’s move stemmed from wanting to decrease exposure to digital asset markets.&nbsp;



A Binance spokesperson said at the time that the exchange was working to find an alternative solution, and that less than 0.1% of its average monthly users were being serviced by the bank.



Binance CEO Changpeng Zhao acknowledge in a tweet that the move reflected “bad user experience” and hinted that some banks are moving away from supporting cryptocurrencies.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">While some banks withdrawing support for crypto, other banks are moving in. Some setbacks were expected from last year&#39;s incidents. Long term, keep building.&mdash; CZ 🔶 Binance (@cz_binance) <a href="https://twitter.com/cz_binance/status/1622703162850217984?ref_src=twsrc%5Etfw">February 6, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Binance saw a large spike in outflows after the announcement, with millions of dollar-pegged stablecoins including tether and USDC leaving to competitor platforms, <a href="https://www.cnbc.com/2023/02/06/binance-will-suspend-us-dollar-transfers.html" target="_blank" rel="noreferrer noopener">CNBC reported</a>, citing data from Arkham Intelligence.&nbsp;



Still, the amount of US dollar outflows represented just a tiny fraction for a company with $42.2 billion worth of cryptoassets, the report said.



Binance’s native token <a href="https://www.blockworksresearch.com/assets/bnb">BNB</a> didn’t appear to be impacted by the news, and last traded 0.7% higher late Monday.



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CZ Acknowledges Bad User Experience as Binance Suspends US Dollar Transfers

<div id="highlights-block_62f0633984372" class="highlights">
 <ul>
 <li>Binance chief Changpeng Zhao said his firm never completed a transaction to acquire major Indian exchange WazirX in 2019</li>
 <li>WazirX&#8217;s co-founder Nischal Shetty has disputed those claims and said Binance operates crypto-to-crypto pairs and processes digital asset withdrawals</li>
 </ul>
 
</div>



Binance CEO Changpang Zhao said Friday his firm never finalized a deal to acquire Indian crypto exchange WazirX, days after the platform was accused of evading oversight by local agencies.



In a tweet <a href="https://twitter.com/cz_binance/status/1555578417973792769?s=20&amp;t=RMyL5Z3l4L0o0NKRIuZWgA" target="_blank" rel="noreferrer noopener">thread</a>, Zhao said the November 2019 deal &#8220;was never completed&#8221; and Binance only provides &#8220;wallet services for WazirX as a tech solution.&#8221;



&#8220;Binance has never — at any point — owned any shares of Zanmai Labs, the entity operating WazirX,&#8221; Zhao wrote. &#8220;WazirX is responsible [for] all other aspects of the WazirX exchange, including user sign-up, [know-your-customer solutions], trading and initiating withdrawals.&#8221;



That&#8217;s despite the deal, at the time, having been made <a href="https://support.wazirx.com/hc/en-us/articles/360039273693-WazirX-Gets-Successfully-Acquired-By-Binance" target="_blank" rel="noreferrer noopener">public</a> by both <a href="https://www.binance.com/en/blog/all/binance-acquires-indias-leading-digital-asset-platform-wazirx-to-launch-multiple-fiattocrypto-gateways-404105749895733248" target="_blank" rel="noreferrer noopener">Binance</a> and WazirX, which purported to allow users to buy and sell crypto with Indian rupees (INR) via the Binance Fiat Gateway.



WazirX&#8217;s co-founder Nischal Shetty has disputed Zhao&#8217;s claims, in what&#8217;s now a tit-for-tat online feud between the exchange execs.



&#8220;WazirX was acquired by Binance,&#8221; <a href="https://twitter.com/NischalShetty/status/1555602963430785024?s=20&amp;t=Cyfvv8NkIW4dQORfEPEgAA" target="_blank" rel="noreferrer noopener">Shetty tweeted</a>, less than two hours after Zhao had publicly distanced Binance from the exchange. &#8220;Binance operates crypto to crypto pairs, processes crypto withdrawal[s].&#8221;



<h3 class="wp-block-heading">Binance and WazirX ties examined by Indian regulators</h3>



WazirX has drawn the ire of the Directorate of Enforcement (ED), the country&#8217;s financial watchdog, over allegations Zanmai Labs facilitated money laundering on the exchange. 



The exchange touts itself as the country&#8217;s &#8220;largest&#8221; crypto exchange with 31.7 million users, about eight million behind another major Indian exchange, CoinDCX&#8217;s, which recorded 40 million overall in March. 



Binance, the country&#8217;s fourth-largest exchange, garners roughly 27.6 million users, according to <a href="https://www.businessinsider.in/cryptocurrency/news/around-90-million-users-flocked-to-crypto-bandwagon-in-march-2022-report/articleshow/92081565.cms#:~:text=As%20per%20Comscrore's%20report%2C%20CoinDCX,and%2030.1%20million%20users%20respectively." target="_blank" rel="noreferrer noopener">Business Insider India</a>.



A recent ED <a href="https://enforcementdirectorate.gov.in/sites/default/files/latestnews/PR%20HYZO_Freezing%20of%20assets%20of%20WazirX%20Crypto%20Exchange.pdf" target="_blank" rel="noreferrer noopener">investigation</a> has claimed large amounts of funds were diverted from questionable, non-bank financial institutions and their fintech partners to WazirX, which were then laundered abroad.



Domestic Indian publication <a href="https://www.business-standard.com/article/markets/ed-serves-fema-notice-to-cryptocurrency-exchange-wazirx-minister-122080301365_1.html" target="_blank" rel="noreferrer noopener">Business Standard</a> first reported on the investigation.



Regulators have accused Zanmai Labs of creating a &#8220;web of agreements&#8221; with social media management tool Crowdfire, also founded by Shetty, alongside Singapore holding company Zettai and Binance&#8217;s Cayman Islands entity. This was meant to obscure ownership of WarzirX, according to a <a href="https://enforcementdirectorate.gov.in/sites/default/files/latestnews/PR%20HYZO_Freezing%20of%20assets%20of%20WazirX%20Crypto%20Exchange.pdf" target="_blank" rel="noreferrer noopener">statement</a> Friday.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">2/ You can check this fact by going to the TOS of WazirX More facts about WazirX: • Binance owns WazirX domain name • Binance has root access of AWS servers • Binance has all the Crypto assets • Binance has all the Crypto profits Don’t confuse Zanmai and WazirX&mdash; Nischal (Shardeum) ⚡️ (@NischalShetty) <a href="https://twitter.com/NischalShetty/status/1555602967813816320?ref_src=twsrc%5Etfw">August 5, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The ED has issued a freeze on Zanmai director Sameer Mhatre&#8217;s bank balances worth INR 646,700,000 ($8.1 million) over an alleged failure to cooperate with the agency.



Shetty previously claimed WazirX controls all crypto-crypto and INR-based crypto transactions with only intellectual property and preferential agreement with Binance. 



Zanmai Labs now claims it is only involved in INR-based crypto transactions where all other trades are handled by Binance on WarzirX, the agency said in its statement.



WazirX is accused of giving &#8220;contradictory and ambiguous&#8221; answers to &#8220;evade&#8221; regulatory oversight from Indian authorities.



&#8220;Recent allegations about the operation of WazirX and how the platform is managed by Zanmai Labs are of deep concern to Binance,&#8221; Zhao said. &#8220;Binance collaborates with law enforcement agencies all around the world. We would be happy to work with ED in any way possible.&#8221;



WazirX and a spokesperson for Zhao did not immediately return a request for comment.



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Binance Distances Itself From India’s Crypto Exchange WazirX

David Canellis

<div id="highlights-block_62a72781bb960" class="highlights">
 <ul>
 <li>Celsius liquidity crunch has spooked crypto investors, but the broader equity markets are also lower</li>
 <li>MicroStrategy is down 27% at market open, as Michael Saylor&#8217;s leveraged BTC bet is underwater</li>
 </ul>
 
</div>



Panic is sweeping crypto markets in early Monday trading following unsettling news of paused withdrawals at Celsius and Binance. The total market capitalization of all cryptoassets has dropped to around $960 billion, its lowest point in 18 months.



The weekend saw dramatic selloffs — exacerbated by compressed volatility over the past few weeks — across the entire digital asset sector, with almost every top 50 cryptocurrency in the red.



Bluechips bitcoin (BTC) and ether (ETH) respectively fell 25% and 38% in the past seven days. BTC currently changes hands for $23,700 — prices not seen since December 2020, when it had begun accelerating toward $50,000 for the first time.



ETH, on the other hand, is now valued under $1,200. Skittish markets sent Lido’s staked ETH derivative (stETH) far below par. Units of stETH trade for 0.9342 ETH as of 8 am ET, its lowest point ever.



While lending platform Celsius faces rumors of insolvency, governance tokens for lending platform Aave (AAVE) and the BoredApe ecosystem (APE) were the hardest hit among top 50 tokens, respectively falling 49% and 47% throughout the week.



Cryptocurrencies powering alternate layer-1s Elrond, Avalanche and NEAR similarly fell between 47% and 45%. The top 50 (sans stablecoins and wrapped assets) sank 34% on average.



Native tokens for crypto exchanges once again outperformed the market during the past week’s carnage. Bitfinex’s <a href="https://cms.blockworks.co/how-cryptoasset-markets-have-changed-since-terra-crash/" target="_blank" rel="noreferrer noopener">LEO</a> is the only top 50 token in the green, having risen 8%.&nbsp;



FTX and Huobi’s offerings (FTT and HT) were the second and third best performing among the top 50 over the past seven days, having respectively fallen 10% and 28%.&nbsp;



With altcoins significantly heavier than BTC, the top cryptocurrency’s dominance rose almost 2%. BTC is now 47.9% of the entire crypto market, while ETH dominance dropped more than 15% to just above 15% — its lowest point since April 2021.



Top stablecoins Tether (USDT) and Circle’s USD Coin (USDC) now make up more of the crypto market, as traders seek shelter from volatility in dollar-pegged tokens, now 7.7% and 5.7% respectively.



Tether is fielding significant USDT inflows, either a sign of demand for fiat redemptions, or repayment of loans. The company sought to downplay its exposure to Celsius in <a href="https://tether.to/en/celsius-feels-impact-of-market-volatility-tether-reserves-hold-strong" target="_blank" rel="noreferrer noopener">a blog post</a> Monday, asserting that any issues Celsius may be facing has “no impact on our reserves.”



Severe devaluations across the crypto sector have also severely crippled crypto stocks. Michael Saylor’s MicroStrategy — which holds some $3.1 billion in Bitcoin — is down an eye-watering 27% during Monday pre-market trade, set to test its May 12 lows.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1016" height="606" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/06/Screenshot-2022-06-13-at-15.31.25.png" alt="" class="wp-image-22768" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/06/Screenshot-2022-06-13-at-15.31.25.png?w=1016 1016w, https://blockworks-co.imgix.net/wp-content/uploads/2022/06/Screenshot-2022-06-13-at-15.31.25.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/06/Screenshot-2022-06-13-at-15.31.25.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/06/Screenshot-2022-06-13-at-15.31.25.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/06/Screenshot-2022-06-13-at-15.31.25.png?w=438 438w, https://blockworks-co.imgix.net/wp-content/uploads/2022/06/Screenshot-2022-06-13-at-15.31.25.png?w=367 367w, https://blockworks-co.imgix.net/wp-content/uploads/2022/06/Screenshot-2022-06-13-at-15.31.25.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/06/Screenshot-2022-06-13-at-15.31.25.png?w=50 50w" sizes="(max-width: 1016px) 100vw, 1016px" /><figcaption>MicroStrategy shares in early trading; Source: TradingView</figcaption></figure>



MicroStrategy is now underwater on its BTC purchases by about 20%, according to <a href="https://bitcointreasuries.net/" target="_blank" rel="noreferrer noopener">BitcoinTreasuries</a>.



Crypto exchange Coinbase looks set to open the day 18% below its previous close, while mining outfit Marathon Digital is eyeing a 16% drop.



Binance CEO Changpeng &#8220;CZ&#8221; Zhao added fuel to the fire after the exchange initiated a &#8220;temporary pause of BTC withdrawals.&#8221;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Temporary pause of <a href="https://twitter.com/search?q=%24BTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$BTC</a> withdrawals on <a href="https://twitter.com/hashtag/Binance?src=hash&amp;ref_src=twsrc%5Etfw">#Binance</a> due to a stuck transaction causing a backlog. Should be fixed in ~30 minutes. Will update. Funds are SAFU.&mdash; CZ 🔶 Binance (@cz_binance) <a href="https://twitter.com/cz_binance/status/1536317704990208000?ref_src=twsrc%5Etfw">June 13, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Initially billed as a 30-minute suspension, CZ <a href="https://twitter.com/cz_binance/status/1536323261193236481" target="_blank" rel="noreferrer noopener">followed up</a> on his tweet, noting &#8220;this is going to take a bit longer to fix than my initial estimate,&#8221; and suggesting users withdraw a wrapped version of bitcoin on the BNB Chain.



Both the rationale and the suggestion are unusual. Bitcoin transactions — unlike Ethereum and some other chains — do not typically need to be executed one after another. Withdrawals to BEP-20 would not be the native asset, so few Bitcoiners would see that as a viable alternative to native bitcoin withdrawals.



This is a developing story.



This story was updated on Jun. 13 at 9:08 am and 9:32 am ET.



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Crypto Total Market Capitalization Under $1T after 10% Fall

<div id="highlights-block_6296d4c34d5e2" class="highlights">
 <ul>
 <li>Binance Labs&#8217; latest fund joins the likes of venture capital giant Andreessen Horowitz in pouring dollars into Web3 startups</li>
 <li>Binance said it intends to allocate the $500 million to projects across three stages of a startup&#8217;s lifecycle: incubation, early-stage venture, and late-stage growth</li>
 </ul>
 
</div>



The venture capital and incubation arm of Binance said Wednesday it has closed a new fund to the tune of $500 million, supported by global institutional investors DST Global Partners and Breyer Capital.



Binance Labs said the fund will invest in projects that can extend the use cases of cryptocurrencies and drive the adoption of Web3 and blockchain technologies.



Several other major private equity funds, family offices and corporations will also support the fund as limited partners, according to a statement on Wednesday.



The crypto industry continues to experience large allocations of capital, and Binance&#8217;s latest fund, while considerable, is not uncommon. Last week, venture capital giant <a href="https://cms.blockworks.co/andreessen-horowitz-launches-largest-crypto-fund-ever/" target="_blank" rel="noreferrer noopener">Andreessen Horowitz</a> launched a $4.5 billion fund — the industry&#8217;s largest to date.



That fund, also slated for Web3 startups, places a large bet on the fusion of technologies, including machine learning, artificial intelligence and blockchain, to achieve what some are hoping is the next evolutionary stage of the internet.



&#8220;In a Web3 environment, the connection between values, people, and economies is essential,&#8221; Binance founder Changpeng &#8220;CZ&#8221; Zhao said in a statement. &#8220;If these three elements come together to build an ecosystem, that will accelerate the mass adoption of the blockchain technology and crypto.&#8221;



Like others in the industry, the firm aims to invest the $500 million in startups across three different stages: incubation, early-stage venture and late-stage growth.



<a href="https://cms.blockworks.co/?s=binance+labs" target="_blank" rel="noreferrer noopener">Binance Labs</a> is well versed in the investment arena, having poured money into or supported more than 100 projects across 25 countries since its inception in 2018. Its portfolio includes industry heavy-weight projects including 1inch, Audius, Axie Infinity, Dune Analytics, Elrond, Injective, Polygon, Optimism, The Sandbox and STEPN.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



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Binance Launches $500M Fund To Drive Web3 Adoption

<div id="highlights-block_61b72713fea8d" class="highlights">
 <ul>
 <li>Binance.sg will shut down on Feb. 13, as Binance Asia will refocus activities in the city-state on its recent investment in regulated exchange HGX</li>
 <li>Binance’s CEO, Changpeng Zhao, says the Binance Asia application for payment services licensing in Singapore was made “somewhat redundant”</li>
 </ul>
 
</div>



The world’s largest digital asset exchange by volume, Binance, has been making moves to increase regulatory compliance for much of the past year. In June, Binance added a Singaporean subsidiary, Binance Pte, as it awaited licensing review from the Monetary Authority of Singapore (MAS), Blockworks <a href="https://cms.blockworks.co/binance-continues-to-plant-seeds-for-singapore-move/" target="_blank" rel="noreferrer noopener">previously reported</a>. The company now is shifting its focus to a MAS-regulated exchange in which Binance took an 18% stake last week.



According to <a href="https://binancesingapore.zendesk.com/hc/en-us/articles/4416402912525-Announcement-to-all-Binance-sg-users" target="_blank" rel="noreferrer noopener">an announcement posted</a> to Binance.sg, the Singapore brand is slated to wind down early next year:



<blockquote class="wp-block-quote">“Binance Asia Services Pte Ltd (BAS) intends to withdraw its licensing efforts in Singapore and wind down its digital payment token (“DPT”) services in Singapore by 13 February 2022.  The decision has not been made lightly, and we apologize in advance for any inconvenience this may cause.”</blockquote>



The announcement further states that Binance.sg has halted user registrations, KYC processes, and both crypto and fiat deposits. Trading will continue only through Jan. 12, 2022, after which users will have one month to withdraw their assets before all accounts will be closed.



Binance’s CEO, Changpeng Zhao, <a href="https://twitter.com/cz_binance/status/1470294674728689664" target="_blank" rel="noreferrer noopener">took to Twitter</a> Monday morning to clarify that the license application withdrawal was due Binance’s investment in Singaporean exchange, HGX.



“This investment made our own application somewhat redundant. We will continue to work through our partners to grow the crypto industry in Singapore,” he wrote.



Richard Teng, who was appointed CEO of BAS in June, was previously the <a href="https://www.businesstimes.com.sg/companies-markets/private-exchange-hgx-begins-trading" target="_blank" rel="noreferrer noopener">chairman at HGX</a> and spent 13 years at the Monetary Authority of Singapore <a href="https://www.linkedin.com/in/richard-teng-3497b527/" target="_blank" rel="noreferrer noopener">before that</a>.



“In Singapore, we continue to work closely with key government agencies to support the growth of the blockchain ecosystem and development of requisite local talent needed,” Mr Teng told <a href="https://www.straitstimes.com/business/companies-markets/binance-acquires-18-stake-in-singapore-regulated-hg-exchange" target="_blank" rel="noreferrer noopener">The Straits Times</a>.



A Binance Asia spokesperson was not immediately available for comment.



Binance Coin (BNB) is trading about 3.4% lower since the announcement.




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Binance Asia Will End Service in Singapore

Sam Reynolds

<div id="highlights-block_619cb0d210858" class="highlights">
 <ul>
 <li>Binance has registered a fourth entity in Ireland, according to a corporate filing spotted by The Independent</li>
 <li>For some time it looked as if Binance would call Singapore home base, but relations have soured between the company and the Monetary Authority of Singapore</li>
 </ul>
 
</div>



It looks as if Ireland will be the new home for Binance. The exchange, which until recently was famously decentralized, has registered a new entity in Ireland — first spotted by <a href="https://www.independent.ie/business/irish/cryptocurrency-exchange-binance-steps-up-plans-for-hq-in-ireland-41079314.html" target="_blank" rel="noreferrer noopener">The Independent</a>. 



Binance Exchange (Ie), the new entity, is believed to be poised to serve as the corporate “mothership” and not a technology licensing holding company or a regional subsidiary.&nbsp;



In an <a href="https://www.reuters.com/technology/binance-ceo-says-ireland-is-part-its-hq-plans-2021-10-07/" target="_blank" rel="noreferrer noopener">interview with Retuers in October</a>, Binance CEO Changpeng Zhao said that the company was considering Ireland as a headquarters, along with France, according to an interview with French newspaper <a href="https://www.lesechos.fr/finance-marches/marches-financiers/binance-le-patron-de-la-plus-grande-plateforme-de-cryptos-mondiale-explique-sa-strategie-aux-echos-1362803" target="_blank" rel="noreferrer noopener">Les Echos</a>, and another unnamed European city. 



<blockquote class="wp-block-quote">&#8220;When we first started we wanted to embrace the decentralized principles, no headquarters, work all around the world, no borders,&#8221; he said to Reuters. &#8220;It&#8217;s very clear now, to run a centralized exchange, you need a centralized, legal entity structure behind it.&#8221;</blockquote>



<h3 class="wp-block-heading">Why not Singapore?</h3>



As Binance began its existence in Asia, it was thought that it would try to maintain its headquarters there. Given <a href="https://cms.blockworks.co/hong-kong-and-singapore-take-different-approaches-to-regulating-digital-assets/" target="_blank" rel="noreferrer noopener">Singapore’s crypto-friendly</a> nature, the city-state would be a logical choice to host the exchange’s headquarters. In August, it announced that it had hired Singapore Exchange executive Richard Teng as CEO of Binance Asia Services Pte, a company it registered in Singapore in 2018.



“Singapore is widely considered to be the blue-chip destination for financial and regulatory security and oversight,” Michael Conn, CEO of Singapore-based Zilliqa Capital, told Blockworks in an earlier interview. “Setting up their business in Singapore will make it much easier for Binance to pursue a traditional equity raise, since Singapore is not seen as a tax haven or a place for shady dealings.”&nbsp;



However, Binance poisoned the well in early September by running afoul of the Monetary Authority of Singapore which alleged the exchange — a different entity entirely from its Binance.sg subsidiary —&nbsp; was in violation of the Payment Services Act for carrying on the business of providing payment services to, and soliciting such business from Singapore residents without an appropriate license.



<h3 class="wp-block-heading">First a headquarters, then a sovereign wealth fund</h3>



Zhao’s vision for Binance includes an IPO and investment from the world’s largest institutional investors. But for that to happen, there needs to be a headquarters, which is something he’s also admitted.&nbsp;



In a recent interview with the <a href="https://www.ft.com/content/006b727a-cc20-403e-ad53-6a23571e6c1c" target="_blank" rel="noreferrer noopener">Financial Times</a>, Zhao has said Binance is in talks with sovereign wealth funds about investment in the exchange. 



Speaking with the paper, Zhao said that investment from these funds would improve the exchange’s “perception and relationships” with various regulators around the world.



“But it may also tie us to specific countries&#8230;which we want to be slightly careful with,” he also said.  Binance’s BNB token appears to be unaffected by the news and, at time of publication, is up 0.2% on the day according to <a href="https://www.coingecko.com/en/coins/binance-coin" target="_blank" rel="noreferrer noopener">CoinGecko</a>.

Binance Looks to Settle on Ireland as Global Headquarters

Jacquelyn Melinek

<div id="highlights-block_6165b1bd8971d" class="highlights">
 <ul>
 <li>Half of the billion dollars will go to investments, while the other $500 million will be divided across the remaining initiatives</li>
 <li>Binance aims “to disrupt traditional finance and accelerate global mass adoption of digital assets to become the first-ever blockchains ecosystem with 1 billion users,” CEO &#8216;CZ&#8217; Changpeng Zhao said in a statement</li>
 </ul>
 
</div>



The blockchain and cryptocurrency giant Binance has launched its $1 billion Crypto Mass Adoption Fund to accelerate the number of people adopting digital assets and blockchain technology, the company said Tuesday.&nbsp;



Last year, Binance put up <a href="https://www.binance.org/en/accelerator" target="_blank" rel="noreferrer noopener">$100 million</a> to support projects on its <a href="https://www.binance.org/en" target="_blank" rel="noreferrer noopener">Binance Smart Chain</a> (BSC) with its BSC Accelerator Fund. BSC is Binance’s Ethereum-derived platform for decentralized applications, or dApps. Now the company is adding more support with this new investment.&nbsp;



Since its original $100 million fund was set up to grow the BSC ecosystem, it has funded over 40 projects and over 200 startups have received funding under hackathons and grant programs, Binance said in <a href="https://www.binance.org/en/blog/binance-launches-one-billion-binance-smart-chain-fund-to-reach-one-billion-crypto-users/" target="_blank" rel="noreferrer noopener">a blog post</a>. The community has over 1 million daily active users across 900 dApps, it said.&nbsp;



&#8220;BSC&#8217;s growth has attracted over 100 million users with its initial funding of $100 million,&#8221; Binance CEO &#8216;CZ&#8217; Changpeng Zhao said in a statement. &#8220;With the additional contribution of $1 billion, BSC will be better equipped to disrupt traditional finance and accelerate global mass adoption of digital assets to become the first-ever blockchains ecosystem with 1 billion users,” Zhao added.&nbsp;



The company did not respond to requests for comment from Blockworks about how the fund plans to use the capital to integrate and onboard users and developers to Web3.&nbsp;



However, Binance stated that the $1 billion will be divided across four initiatives: investments, its builder program, talent development, and liquidity incentives. Half of the billion dollars will go to investments, while the other $500 million will be divided across the remaining initiatives, with $300 million going to the builder program, $100 million to liquidity incentives and $100 million going to talent development, it said.&nbsp;



<blockquote class="wp-block-quote">“The program is designed to boost the growth and innovation of projects and bolster the wider community and create a crypto-native pool of talent that will pave the future of crypto,” the company said.&nbsp;</blockquote>



The ecosystem focuses mainly on the US, Europe, Russia, India, South East Asia and South America, it said. Going forward, it will work closely with other FinTech companies, crypto advisors and blockchain researchers to “spread the vision of financial inclusion and sovereignty,” the company said.

Binance Creates $1B Fund to Accelerate Crypto Adoption

<div id="highlights-block_61018aed04aee" class="highlights">
 <ul>
 <li>Binance has had a tough month of regulatory challenges which culminated in its CEO offering to resign </li>
 <li>Despite this, the market still has confidence in the exchange as outflows aren’t trending above the market norm</li>
 </ul>
 
</div>



Binance’s CEO Changpeng “CZ” Zhao <a href="https://cms.blockworks.co/regulators-are-coming-for-crypto-heres-how-firms-are-reacting/" target="_blank" rel="noreferrer noopener">said yesterday</a> that he would be willing to step down as the exchange pivots to become a regulated entity amidst continued inquiries from regulators worldwide.



Despite initial reports of an uptick in outflow from the exchange, data from on-chain aggregator Chain.info shows that flow is stable and the market hasn’t voted with its virtual feet to vacate the exchange.&nbsp;



According to data from Chain.info, the majority of volume from Binance has been moves within internal wallets. This is likely due to reconfiguring of portfolios to prepare for next week’s hard fork of Ethereum, and the subsequent price movements on ether and the broader DeFi market.&nbsp;



<figure class="wp-block-image size-large"><img decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/07/binance-outflow-1024x234-1.jpg" alt="Binance on-chain assets" class="wp-image-5938"/><figcaption>Source: Chain.info</figcaption></figure>



<a href="https://markets.chainalysis.com/#demand-total-flows" target="_blank" rel="noreferrer noopener">Chainalysis reports</a> that within the overall market, bitcoin inflows to exchanges are above the 180 day average at 88,600 BTC. With bitcoin’s recent rally to nearly $40,000, Chainalysis says that the last week has seen a higher-than-average flow of bitcoin to fiat exchanges as traders are looking to cash out. This is still down on-year given the last few months’ bear market following <a href="https://cms.blockworks.co/crypto-crash-when-musk-the-environment-tax-day-and-china-collide/" target="_blank" rel="noreferrer noopener">May’s crypto crash</a>.&nbsp;



Separately, Whale Alert, a service that monitors the movement of large crypto transactions, noted that a trader moved over $1.3 billion in bitcoin off of Coinbase in <a href="https://whale-alert.io/transaction/bitcoin/9d369258440f1fd8b876c24b1e91f863fc0d73240f223e98b4ccfbf3371c1bd7" target="_blank" rel="noreferrer noopener">three</a> <a href="https://whale-alert.io/transaction/bitcoin/e0978d2329290d864fb4b8291dff82cc51fc1b42e03a028417da6d2e0a42722a" target="_blank" rel="noreferrer noopener">separate</a> <a href="https://whale-alert.io/transaction/bitcoin/60aa05617a0abb06dbd6dba651a187199f9f41f1a7a165c9670e902fa95cbd6b" target="_blank" rel="noreferrer noopener">transactions</a>. But despite that might look like an intense period for trading, Chainalysis says that the median trade intensity is below the 180 day average — however, it jumped significantly between July 25-26.&nbsp;



The price of BNB, Binance’s exchange token that’s often seen to be the equivalent of an equity, is up 2% to $314 according to data from <a href="https://www.coingecko.com/en/coins/binance-coin" target="_blank" rel="noreferrer noopener">CoinGecko</a>.



Want more investor-focused content on digital assets? <a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a> September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket. <a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.