The exchange has attracted the attention of regulators seeking to impose some control over the crypto sector. Earlier this year, the Commodities and Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), two US regulators, filed civil lawsuits accusing Binance of a long list of irregularities, including mixing customer assets, anti-money laundering violations, and artificially inflate transaction volumes.
Binance staff are preparing for criminal charges against the company, according to a former employee, who asked to remain anonymous for fear of retaliation. The apparent confirmation that the DOJ is preparing criminal charges will do nothing to alleviate the “concern and anxiety” within the company, which began this summer when it began carrying out large-scale layoffs and to eliminate various benefits and perks, the former employee said. , who left the company earlier this year. While there are no signs the company is in immediate financial danger, there is a “general sense of doom” at Binance, the former employee said.
If the US imposed criminal sanctions on Binance, says Jacob Silverman, author of Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraudthis would “set the banks back”, effectively stifling trade by preventing their ability to accept ordinary currencies from customers. “For all crypto companies, access to banking services and money is a perpetual challenge and imperative.”
Even offshore banks should fall in line, says Stephen Diehl, a crypto-skeptical commentator. “The US dollar is the world’s reserve currency… Banks rely heavily on [dollar] come from the United States,” he says. “Whether it comes down to dropping Binance as a customer or continuing to do business with the US, it won’t be a difficult decision to make. Even the Bank of China depends on foreign dollar reserves.”
According to Silverman, if Binance were to fall as a result of criminal proceedings against it, it would cause considerable damage, especially to ordinary people’s appetite for trading cryptocurrencies. “If FTX wasn’t the end of mainstream crypto as we know it, the collapse of Binance certainly would be,” he says. “It is one of the many pillars that support the mainstream crypto market, and certainly the most important.”
