Binance’s 4.3 billion US dollar deal with the US justice system is reverberating. Analysts at major bank JPMorgan see the settlement as a “positive” sign for the crypto industry.
On day two after the historic deal between the US judiciary and the world’s largest crypto exchange Binance, analysts continue to organize their thoughts. The major US bank JPMorgan sees “positive” signs for the crypto industry in the events. The out-of-court settlement of USD 4.3 billion in fines has eliminated “the systemic risk of a hypothetical Binance collapse”, JPMorgan analysts are quoted as saying in US media. In fact, the data from DeFiLlama, for example, shows Binance’s market dominance. With more than USD 60 billion in Bitcoin and Co., Binance holds as many assets as the ten other largest crypto exchanges combined.
JPMorgan now has a positive outlook for Binance and its ecosystem. Uncertainties surrounding Binance Coin (BNB) have now been eliminated. The ecosystem around the Binance Smart Chain (BSC) should also benefit from Binance leaving its legal legacy in the US behind. However, the markets remain sceptical: BNB’s price curve plummeted by 10 percent after the deal was announced and now appears to be stabilizing at levels around USD 235. Around USD 1 billion in deposits were withdrawn from Binance itself, but here too there has been no real “bank run”.
The situation is painful for Binance founder Changpeng Zhao, CZ for short. He had to step down as CEO and pleaded guilty to violating US laws on money laundering and sanctions policy. He is due to go on trial in February 2024. The public prosecutor’s office wants to keep him in the USA until then because it believes Zhao is a flight risk. CZ is facing up to 18 months in prison. He had assumed that he would be allowed to return to his adopted home of the United Arab Emirates by paying 175 million US dollars bail until the trial. Now a court must decide.
Conclusion: Binance survives the crisis
The new Binance CEO Richard Teng has already published an external analysis on X, according to which Binance will probably be able to pay the 4.3 billion US dollar fines from its reserves without selling its own Bitcoin and Co. on a large scale. It seems that Binance has enough stablecoins that can be exchanged for US dollars. Incidentally, these calculations come from Conor Grogan, who is head of department at Binance’s competitor Coinbase. There are currently many indications that Binance will overcome its crisis and not trigger a downward spiral for the crypto markets. This was very different when the crypto exchange FTX collapsed a year ago.
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