Binance, the largest crypto exchange, has been under regulatory pressure since 2018. At the same time, it was 2022 and the beginning of 2023 that became especially tense for the company. The editors of BeInCrypto decided to find out what will happen to the market if Binance dies. Experts helped us to understand the issue
Binance under pressure
The tension around Binance began to intensify at the end of 2022 – against the backdrop of the collapse of one of the main competitors of the crypto exchange – FTX. During this period, the media reported that the US Department of Justice was preparing charges of money laundering against the company and its founder. The news provoked a massive outflow of assets from Binance and became an occasion for discussion of the possible collapse of the crypto exchange. Despite enormous pressure, the platform survived.
In February 2023, Binance faced another attack. This time, the US Securities and Exchange Commission (SEC) saw in the stablecoin of the crypto exchange – Binance USD (BUSD) – signs of a security. The stablecoin issuer, Paxos, has stopped issuing tokens and severed its relationship with the trading platform. Another attack by regulators cost Binance $1 billion.
Against the backdrop of pressure from regulatory authorities, the network again began to discuss the imminent death of the crypto exchange. The BeInCrypto editors learned the opinions of experts on what will happen to the market if Binance collapses.
What happens if Binance collapses
According to StormGain crypto exchange expert Dmitry Noskov, the collapse of Binance will result in a “domino effect” that will lead to the death of many other crypto companies. Such a chain of events, our interlocutor is sure, will be a critical blow for the entire industry. Konstantin Kovalev, an expert analyst at Crubex, shared a similar opinion.
“In the event of the collapse of the Binance exchange, the most global and protracted crypto winter will come to the market. Bitcoin (BTC), Ethereum (ETH), Binance Coin (BNB) and Binance USD (BUSD) stablecoin will be the first to be affected. The collapse of altcoins will follow. After the correction of cryptocurrency rates by 60–70%, a wave of collapse of all sectors of the crypto industry associated with Binance will begin, namely: Launchpad and Launchpool services, non-fungible tokens (NFT), metaverses. In addition, positions in derivative markets will be forcibly closed, and the option of increasing volatility in the stablecoin market is not ruled out, ”our interlocutor is sure.
Vasily Kudrin, investment director of the Lybrion international group, in turn, believes that in the event of the collapse of Binance, the role of decentralization in the crypto industry will increase, which will lead to another qualitative and quantitative development of Web3, decentralized finance and the economy.
“Under the current conditions, a year before the next Bitcoin halving, with already obvious signs of the beginning of the crypto spring, this [крах Binance] is unlikely to lead to a prolonged depression in the market. Therefore, carrying out crypto-repressions by state regulators, in order to deprive the crypto market, is a bad, unproductive undertaking,” our interlocutor summed up.
Recall that earlier information appeared on the network that Binance had changed its mind about investing in American startups and saving bankrupts from the United States.
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