Is Binance In A lot Of Trouble?

How much trouble is Binance in right now? From rumors circulating on the web over the past months and the latest developments that are occurring, it appears that Binance is facing significant challenges.

Let's start from the beginning. Following the collapse of FTX, Binance and CZ emerged as defenders of the crypto industry, taking on the role of prominent figures in the crypto space. For a while, CZ seemed to be handling this position quite well, at least in the public eye. He engaged in constant travels and meetings with world leaders, secured licenses in various nations, provided proof of reserves, and gave the impression of doing everything right this time.

However, the situation took a turn when the SEC (U.S. Securities and Exchange Commission) initiated a lawsuit against Binance and CZ for alleged insider trading and unlicensed securities trading. The SEC also filed a lawsuit against Paxos, the issuer of Binance's native stablecoin BUSD. It's worth noting that the SEC seemed to be pursuing legal action against multiple entities.

Meanwhile, rumors were spreading that Binance had been selling BTC, causing a market downturn, purportedly to support the price of BNB and due to a margin call. Another rumor had circulated earlier that Binance had been buying BTC with BUSD in an attempt to unload that asset, possibly due to concerns about maintaining its peg. This occurred about a month before the SEC filed a lawsuit against Paxos, which appeared to drive the entire market upward.

But let's see what is that margin call that makes so much noise.

As explained by @zkHopium, the loan in question began with BNB Chain’s 2 million hack in October 2022, during which a hacker minted 2 million BNB (then worth $600 million) from thin air.

The hacker later deposited 900,000 stolen BNB into Venus, borrowing $150 million worth of USDT and USDC stablecoins. This theoretically puts those funds at risk of liquidation should BNB’s price dramatically fall, creating the potential for a massive BNB market crash.

In response, Venus whitelisted BNB Chain as the sole eligible liquidator for the loan, which has since paid off 90 million USDT on the loan.

https://twitter.com/zkHopium/status/1694537006150475962

Nevertheless, liquidation remains a threat. According to zkHopium’s calculations, the loan’s liquidation threshold is $196, at which point liquidators can typically liquidate 50% of collateral. BNB’s current price is $217.
Should this occur, however, the analyst doubts that a massive pile of BNB will actually flood the market.
“As BNB Chain is unlikely to market dump seized collateral (some rumored to say they may even burn the BNB), there will not be $200m+ BNB flooding the market in a liquidation scenario,” the analyst wrote.

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Of course CZ is denying everything and claims everything is alright but then again Mastercard just stopped issuing Binance cards and stopping their partnership .

Mastercard

Mastercard (MA.N) and crypto exchange Binance will end their four crypto card programmes in Argentina, Brazil, Colombia and Bahrain as of Sept. 22, a spokesperson for Mastercard said via email on Thursday.

Visa
And Visa stopped issuing new Binance cards since July.
Apple Pay
And Apple pay has for the past month stopped working on buying crypto in Binance,

Difficulties are piling up as the world’s largest cryptocurrency exchange is under pressure from regulators worldwide. Binance was cut off from the US banking system in February and lost the ability to accept some bank transfers in Australia in May.

Most recently, the exchange decided to shut down a year-old product called Binance Connect, which allows businesses to accept cryptocurrencies through Visa and Mastercard. Its banking partner in Europe will stop providing support in September.

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Well Binance is the biggest exchange and if it shuts down then all hell will break loose so guys do your due delligence and stay Safu

Posted Using LeoFinance Alpha

Photo source

Posted Using LeoFinance Alpha