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Just as the domestic regulatory turmoil has subsided, the overseas regulatory drama seems to have just begun.
On November 26, OKEx users who had waited for a month finally saw the light of day. In response to the practice of "banning users from withdrawing coins for a month", OK first launched a compensation feedback plan. The exchange, which had suspended withdrawals due to the loss of contact with the private key manager, finally reopened withdrawals at 4 pm.
Xiong Da discovered that Xu Mingxing, the founder of OK who later returned to the stage, publicly stated that the reason he was asked to cooperate with the investigation was due to an equity merger and acquisition transaction completed a few years ago. "The judicial authorities have already found out the facts and cleared my name."
Judging from his statement, Xu cooperated with the investigation in his personal capacity, and the incident had nothing to do with the digital asset exchange business. The speculation of "industry black swan" triggered by the OK incident also died down.
Just as the domestic regulatory turmoil has subsided, the overseas regulatory drama seems to have just begun.
Binance.com is stepping up efforts to clear US user accounts
On November 25, a large number of US Binance users once again received a deadline for withdrawal notice from the platform, requiring all US main site users to withdraw funds within 14 days, otherwise their accounts will be locked. US users received a "blocking" notice from Binance's main site <br />This is not the first time that US users have received an expulsion order from Binance. As early as early November, Binance began to send emails to users with US-related IP addresses, and the deadline at that time was to switch the main site assets to Binance US within 90 days. Now, the deadline has been shortened from 90 days to 14 days, which makes it hard not to worry about Binance's overseas situation.
A month earlier, Forbes published an article about "How Binance evaded scrutiny by US regulators", saying that Binance may have attracted the attention of US regulators. At the time, Binance responded that the report was false and filed a lawsuit against Forbes magazine and two crypto journalists. Now, it seems that Forbes' article is not groundless.
In Xiong Da’s opinion, although there is no direct evidence that Binance began blocking accounts due to regulatory investigations, the incident also reflects that Binance’s situation in the United States is not optimistic.
According to the information released by Alexa on November 26, in the country/region ranking and visit ratio data of Binance.com, the website visit ratio in the United States is 9.7%, the highest among HBO's three major exchanges. This means that American users are the largest source of traffic visits to Binance.com. Everyone knows that Binance will not clear out American users on a large scale unless it is absolutely necessary. After all, judging from the number of website visits, this is equivalent to cutting off a piece of meat from itself, which is a huge loss for both the platform and users.
Coinbase proactively suspends margin trading to cater to regulation <br />In the past two days, Xiong Da also found that Binance is not the only platform whose operations have been hindered by the tightening of US regulatory policies. There are even signs that since October this year, overseas regulatory agencies represented by the United States have deliberately pressed the fast button for regulation.
Coincidentally, on the day when Binance’s account suspension news came out, Coinbase also announced that it would cut off its on-site trading business, preventing users on the site from making new margin transactions and canceling all open limit orders. This means that after Coinbase’s existing positions expire, the margin trading function will be completely terminated from next month.
Coinbase is an established exchange that holds the Bitlicense, a digital asset license issued by New York, and can provide compliance services to U.S. users. In an interview, Grewal, the platform's chief legal officer, said that the termination of the margin trading function was a response to the "new guidance from the Commodity Futures Trading Commission (CFTC)", but he did not specify which guidance led to this move.
The guidance, which stems from a 2016 enforcement action against Bitfinex, seeks to provide rules about when customers can legally control cryptocurrencies, including when customers acquire crypto assets through margin or leveraged products. Assets purchased through leveraged or margined contracts cannot be liquidated, according to the guidance. If Coinbase wants to continue offering leveraged products, it must register with the CFTC as a commodities exchange.
Overall, Coinbase's suspension of margin trading is more like a self-cutting move to actively cater to regulation, which is a sign of preparing for a rainy day. Xiao Sa, director of the China Banking Law Research Association, once summarized the recent regulatory situation overseas. She predicted that "as overseas regulatory agencies have more and more dealings with exchanges and project parties, seeking a balance between financial consumers and financial innovation, the attitude of regulatory agencies has changed, and it is expected that they will gradually return to the track of strict management in the future."
Is overseas supervision pressing the fast-forward button?
The Binance account suspension incident has allowed the market to see the possibility of overseas regulation returning to a strict management track. Although the U.S. regulatory authorities such as FinCEN, SEC, and CFTC have not yet issued a new round of regulatory requirements for exchanges in terms of the trading and circulation of digital assets, judging from the on-chain data of the exchanges, the overseas market has already triggered a large-scale coin withdrawal movement.
As we all know, the US regulators have a tradition and means of long-arm jurisdiction. In principle, as long as the US dollar is used, it is within the jurisdiction of the United States. For example, in the "BTC-e founder arrest" incident, the founder Alexander Vinnik was arrested in Greece on suspicion of a large-scale online money laundering activity and was subsequently extradited to the United States. Today, Zhao Changpeng, the founder of Binance, who is a Canadian, seems to be exposed to the same risk.
According to Chain.info data, a large amount of Bitcoin from Binance has flowed to other exchanges in the past month, with a specific loss of approximately 61,700 Bitcoins, the largest loss among the three major platforms in recent times.
Previously there was news about BitMEX CTO being arrested, and now Binance is being targeted by US regulators. Out of fear and awe of regulation, a large number of Binance's overseas users eventually chose to flee and tend to go to the more compliant Coinbase.
On October 2 this year, two blockbuster news came from overseas supervision. First, the US regulators filed a lawsuit against the executives and entities of BitMEX, one of the world's largest cryptocurrency trading platforms; second, the CTO of BitMEX has been arrested. The US Department of Justice and the US Commodity Futures Trading Commission (CFTC) stated that BitMEX personnel were suspected of conspiracy to violate the US Bank Secrecy Act, operating an unregistered trading platform, and violating KYC and anti-money laundering regulations.
In August, BitMEX, a heavyweight platform with a trading volume of 72.5 billion US dollars and tens of thousands of daily active users, was also accused of double charges. It is not an exaggeration to call it the "American version of 9.4". With the previous experience of Bitmex, coupled with the recent actions of Binance and Coinbase, it is not difficult to understand the market's concerns about overseas supervision.
For a long time, due to the characteristics of cryptocurrency such as decentralization, anonymity, and global transactions, the pattern of crimes using cryptocurrency has spread all over the world, which is why regulators in many countries are wary of cryptocurrency. However, the market does not need to worry too much. After all, while regulating, overseas regulators represented by the United States also give the market a certain amount of room for development.
What is certain is that as overseas regulations tighten in the future, it will be basically impossible to bypass relevant laws and regulations to provide services to US users without a regulatory status.
Xiong Da has warned about the risks of Binance before. Now that the OKex crisis has been resolved, I still want to talk to you about this matter. It is not easy to trade a coin. All the foreigners on the Binance platform have fled. At this time, domestic investors should stay away from Binance. It is too close to the risk. Don’t let anything unexpected happen in the end, and you will be trapped again. (Ranking of Ponzi schemes) |
