Bitcoin

Binance and CZ sued by the SEC

In the latest episode of The Market Report, analyst and writer Marcel Pechman discusses the impact of the United States Securities and Exchange Commission lawsuit against the Binance exchange.

Most likely, the U.S. population will be barred from using the international version of Binance, and those who opt for VPN services will be at risk of being prosecuted. Pechman believes Changpeng “CZ” Zhao and Binance will lose or strike a deal pleading guilty, pay a fine, and be forced to halt services for North American entities — including Paxos and the Binance USD (BUSD) stablecoin.

Considering Binance is the absolute leader in spot and derivatives trading, one might call the 5% price correction on April 5 a “vote of confidence,” meaning traders believe Binance international will remain fully operational. Worst-case scenario? A hefty fine, but operations will not be impacted, and every client will be made whole, similar to the BitMEX outcome.

As for the 10 tokens that the SEC claims to be securities, North Americans will not be blocked from buying or holding those altcoins, but it adds an extra step if they’re willing to trade them — for example, using a decentralized exchange.

Pechman believes the Coinbase lawsuit differs from Binance’s, as the U.S.-listed company has a huge base of North American clients and can’t move its operations abroad without a significant reduction in its user base and volumes. Moreover, Binance has other issues involved, such as the money transfers between related entities and the potential illicit use of client funds. 

So, the first read for Coinbase shows a much lighter case, very unlikely to become something more eventful, while Binance and CZ’s odds of facing the Department of Justice and criminal charges are way higher. 

Pechman highlights that if the U.S. Federal Reserve continues printing trillions of dollars to sustain the economy, investors will scramble to find scarce assets, so a crypto bull run will happen whether or not Coinbase and Binance are taking part in the process.

Lastly, the show discusses whether the Bitcoin price will retest the $24,000 level, considering the long/short ratio hit levels unseen in over 12 months. The show airs every Tuesday on the Cointelegraph Markets & Research YouTube channel.

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