“Setting up reserves” or “taking over a hot potato”, is Binance in trouble this time?

On June 5, a Bloomberg news triggered heated discussions in the market, Richard Teng may replace Zhao Changpeng as Binance CEO; then, Bloomberg broke the news that Binance and Zhao Changpeng were sued by the SEC , which directly triggered a plunge in the crypto market. The regulatory crisis faced by Binance is self-evident. Who is Richard Teng? Has he really been "reserved"? Can Binance survive this time? How will the crypto market develop in the future?

The master behind the scenes emerges, Binance urgently needs a "middleman"

On June 5, according to Bloomberg, the SEC sued Binance and its CEO Zhao Changpeng for violating U.S. securities trading rules; Bloomberg then further disclosed that the SEC classified SOL, ADA, MATIC, FIL, ATOM , SAND, MANA, ALGO, AXS and COTI as securities in its lawsuit against Binance. If the SEC's classification is true, not only Binance, but also the crypto market will be hit hard. At present, the market has expressed its "attitude" with its own actions. From the technical chart, BTC has fallen below the medium- and long-term trend line of MA128, and a larger downward trend seems to be brewing.

This time, the SEC may not simply file a lawsuit to go through the formalities (we will discuss this in detail later). Due to the seriousness of this issue, the succession issue of Binance has been forced to be put on the table. In addition, during this round of bear market, many crypto institutions have collapsed, but Binance has been able to turn danger into safety. The master behind Binance seems to have surfaced.

Judging from the resume of Richard Teng, the current rumored head of Binance, before joining Binance, Richard Teng worked at the Monetary Authority of Singapore for 13 years. In 2007, he served as the Chief Regulatory Officer of the Singapore Stock Exchange (SGX) for nearly 8 years, responsible for the formulation of rules, frameworks and policies for listing, trading and clearing. He then served as the head of the Financial Services Regulatory Authority of the Abu Dhabi Global Market for 6 years. During his tenure as CEO of FSRA of ADGM, Richard Teng launched a number of products, including digital banks, venture capital, fintech regulatory sandboxes, private REIT systems, manager licensing systems and digital asset trading frameworks. Richard Teng may not have been in the crypto industry for a long time, but his rich experience in government supervision and financial risk control is exactly the "middleman" that Binance needs most under the current regulatory difficulties.

Judging from Richard Teng's promotion resume, the two years when he was promoted on the front line were the two most turbulent years in the crypto market. Many well-known crypto institutions and exchanges fell one after another, and this was also the two years when Binance faced the most complicated regulatory problems. In particular, behind the separation and reunion between Binance and FTX, there may be many experts' guidance. Let's review Richard Teng's tenure at Binance. In August 2021, Richard Teng joined Binance as CEO of the Singapore region; from December 2021 to October 2022, Richard Teng served as Binance's new head of the Middle East and North Africa region; from November 2022 to April 2023, Richard Teng served as the head of Asia, Europe, the Middle East and Africa, and was appointed to lead all regional markets outside the United States two months later. Judging from the timeline, Richard Teng has been promoted four times in the past less than two years, and it is not an exaggeration to say that he is in the position of "crown prince".

Richard Teng may not be modest

From the news level, Richard Teng's "qualification as crown prince" may have formed an internal consensus. According to Coindesk, a former Binance employee who requested anonymity revealed: "Senior leadership and regulators have discussed behind closed doors and believe that Richard Teng is the only leader who can succeed CZ and continue to build the company according to CZ's vision. Teng can also help bridge the existing gap between the industry and regulators." Binance co-founder He Yi also affirmed this executive in a recent interview, "I think he is an experienced professional manager. Since he joined Binance, his scope has been expanding. We all like and recognize Richard."

Richard Teng also seems to be working on taking over Binance. Richard Teng has recently participated in various activities on behalf of Binance at a high frequency, and has been actively operating his Twitter account since May this year. A total of 28 of the 29 tweets were posted since May. It can be seen that Richard Teng has significantly increased his external frequency on behalf of Binance after his latest promotion.

But in essence, Richard Teng is at most a "working emperor". He is a suitable "middleman" for Binance during its transition to compliance. Richard Teng will not be responsible for Binance's past problems; and in the future, even if Zhao Changpeng resigns as CEO due to litigation issues, there will be a "behind-the-scenes" behind the new "CEO". Binance is more like a "hot potato" at present, so it is naturally not a "succession in order, succession of the crown prince" in the peaceful era, so Teng's response to the outside world's speculation is not modest. In his response to the media on June 6, Teng emphasized that Binance admitted that there were problems with compliance in the past, but a major shift has taken place in the past 18 to 24 months. We hope to work with all parties in a responsible manner to resolve all these policy issues and continue to prove that we are a brand new organization. In addition, Teng said in a recent interview with CoinDesk that it is too early to speculate that he is being trained as the "new CEO to replace CZ". The new position is not a promotion, but only an expanded responsibility to help CZ review certain things.

Under regulation, Binance is "surviving the crisis" and the crypto market is treading on thin ice

In February this year, Paxos was ordered to stop issuing new BUSD, and Binance's stablecoin business was unsustainable. In March, the U.S. Commodity Futures Trading Commission (CFTC) sued Binance and Zhao Changpeng for violating regulatory regulations and sought a permanent trading and registration ban. In addition, regulators in Australia, Canada, Dubai and other places are also strengthening their regulatory policies on Binance, and Binance has to stop providing business to relevant regions. Since March this year, Binance's market share has dropped by about 10.8%, and regulation is undoubtedly the main influencing factor. This series of actions has also made the crypto market tread on thin ice and remain silent; after Binance's "tribulation", this is not the end, but just the beginning.

Since the collapse of FTX last year, Silicon Valley Bank and Silvergate have also gone bankrupt this year, and the regulation of the crypto market has been tightening. It may be time to start closing the net. At the beginning of this year, the Federal Reserve and other regulatory agencies have warned the banking industry about "cryptocurrency risks." According to Bitpush, in March, the U.S. Federal Reserve Board explicitly rejected Custodia Bank's membership application. On March 13, U.S. President Biden said that he was pleased that the Treasury Department quickly resolved the problem of Silicon Valley Bank, and would be committed to holding those responsible for creating "this mess" accountable in the future, and planned to continue to work hard to strengthen the supervision of large banks.

According to BitPush, Frank Chaparro, news director of The Block, tweeted that the crypto-friendly bank Signature Bank was closed by New York State regulators on Sunday. This will make the banking situation for crypto companies extremely difficult and absolutely cruel. The capital market for cryptocurrencies has basically returned to the situation before 2014. Any newly established company has no chance of obtaining a banking partnership. In many ways, the cryptocurrency industry has officially lacked banking services.

Summarize

The United States has been performing a targeted operation on the crypto market this year. First, it performed a "surgical operation" to separate the traditional financial and crypto industries in the United States; then it performed an "internal surgery" on the crypto market, attacking major crypto market participants one by one from within the crypto market. Overall, as Binance.US said on Twitter, "the SEC seems to be trying to eliminate our industry."

Regarding the future, perhaps what Binance.US claims would be a good solution: "I hope the SEC can establish a clear and practical regulatory framework in a constructive way so that similar companies can grow and create jobs; I call on Congress to intervene and pass bipartisan legislation to create a viable regulatory system for digital assets and control excessive bureaucracy."