“Newspaper reported”Wall Street Journal“After the collapse of the cryptocurrency exchange FTX, it was replaced by the digital or encrypted currency trading platform for Bitcoin, Binance, which less than a year later was also facing distress.
The newspaper explained that the Binance empire is currently experiencing a strong shock due to some American court rulings. Over the past three months, more than ten senior executives have left, and the exchange has laid off at least 1,500 employees this year to cut costs and prepare for a decline in business.
While the Binance platform is still dominant in the field of cryptocurrencies, its dominance is diminishing, according to the newspaper.
The Wall Street Journal explained that Binance now handles about half of all transactions in which cryptocurrencies are bought and sold directly, down from about 70 percent at the beginning of the year, according to data provider Kaiko.
According to the newspaper, what happens to Binance will have huge implications for cryptocurrencies because this exchange is very large.
Those involved in the sector and observers say that other exchanges will fill the void if the Binance platform collapses, but in the short term, as they believe that liquidity in the market will likely shrink, which may lead to a sharp decline in cryptocurrency prices.
One institutional trader told the Wall Street Journal that his company had conducted exercises to quickly withdraw its assets from Binance in the event of a collapse.
Binance co-founder and chief marketing officer Yi Hee pledged to overcome the problems in a letter to the company’s employees last August.
She said in the letter seen by the newspaper: “Every battle is a life or death situation, and the only thing that can defeat us is ourselves. We have won countless times, and we need to win this time as well.”
Binance is an influential investor in both third-party and off-shore cryptocurrency projects. Binance has invested in X, formerly known as Twitter. Binance co-founder Changpeng Zhao, or “CZ” as he is known by his 8.6 million followers on the X platform, is the biggest face of cryptocurrencies.
The newspaper explained that it cannot be determined what would happen to the sector if Binance disappeared, given that it was responsible for promoting a great deal of innovation and growth in the field of cryptocurrencies.
The US Department of Justice has conducted a years-long investigation that could lead to criminal charges against Binance and Zhao, in addition to billions of dollars in fines, according to people familiar with the investigation who told the newspaper.
Binance is also facing a lawsuit with the Securities and Exchange Commission alleging that it and Zhao are operating illegally in the United States amid allegations of misuse of customer funds. The company acknowledged past mistakes but says customer funds are safe and it is committed to complying with the rules and regulations.
2023-09-27 03:27:39
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