In its complaint filed on Monday at a federal district court in Washington, the SEC added: “Defendants have enriched themselves by billions of US dollars while placing investors’ assets at significant risk.” The complaint alleges that between June 2018 and July 2021, Binance earned at least $11.6bn (£9.3bn) in revenue, mostly from transaction fees.Īmong other charges, the SEC alleges that, while Zhao and Binance publicly claimed that US customers were restricted from transacting on, “Zhao and Binance in reality subverted their own controls to secretly allow high-value US customers to continue trading on the platform”. He insists that our economy should be more robust, strong enough to take on shocks like this.Īt the end of his blog post, he summarized his article with his iconic slogan, "Long Bitcoin, Short the Bankers.“We allege that Zhao and the Binance entities not only knew the rules of the road, but they also consciously chose to evade them and put their customers and investors at risk,” said Gurbir Grewal, director of the SEC’s enforcement division. He believes that COVID-19 is just a trigger and not the real root cause. In the year 2008, there wasn't a pandemic pausing the global economy. the present: Anything different from 2008?Ĭhangpeng Zhao did acknowledge that there is a difference between the current situation in the year 2020 vs. If you want that, you should just short the Dow Jones Index futures." It’s not a perfect inverse correlation product. Don’t expect bitcoin to be guaranteed to go up when the Dow Jones index crashes, or vice versa. I made mine." He further elaborated, "Either way, I hope you understand there are many factors at play in each moment. One they realize it, they will again invest their money in the crypto market.Ĭhangpeng was quick to respond by saying, "you make your judgment. He believes that people will eventually understand that hoarding cash is no longer needed even in pandemic situations because many countries are equipped well enough with a sufficient amount of food and supplies. So there's increased demand or pressure of people wanting to sell their investments (stocks or crypto) into cash, again in the short term." said CZ. ![]() When people fear the doomsday of empty shelves in stores and a shortage of food, people will want to hoard cash. With roughly only 1 in 1000 people having or accepting crypto, it isn’t so useful in a pandemic situation just yet. ![]() The dynamics and psychology are a little bit different. "The 2008 financial crisis didn’t involve a pandemic. However, when the market takes a hit, more people start feeling the cash crunch and hence, a more definite conviction for selling off their crypto assets in the short term, and that's what happened in the last week. When the market takes a hit, they are forced to sell their assets.Īccording to Changpeng Zhao, no one knows the composition of such users in the crypto market. However, 'scamble to pay the rent' are the ones who depend on short term gains to pay their rents. those who 'scramble to pay the rent.' 'Have spare cash' are the ones who have extra money, and even if the price of their crypto assets drop, they are still able to pay their living expenses. The other dimension is those who 'have spare cash' vs. Die-hard believers are the ones who keep their crypto-asset intact and never sell them while the new-to-crypto may not understand crypto that deeply and better but are potential buyers. To answer this question, Changpeng factored the price of Bitcoin on two major dimensions. According to him, the fundamentals haven't changed, and Bitcoin is still limited in supply whose demand is increasing, especially at this very moment. He isn't worried about the cryptocurrency at all. In one of his blog posts posted on March 20, 2020, Changpeng Zhao shared his thoughts on the current situation in the crypto market. However, Binance CEO, Changpeng Zhao has a slightly different opinion on this whole issue. Some analysts blamed the fall in Bitcoin price on the coronavirus outbreak, while some blamed it on the US stock market crash and international oil price fluctuation. In our previous article, we shared what could possibly be the reasons for such a fall. On March 7, 2020, the Bitcoin price took a big blow by falling from a staggering $9200 mark to $7,000 and again taking a hit to mere $3,500, later bouncing back to $6,000.
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