12th July 2022 > > Binance.

tl;dr

Binance could be in trouble over Iran.

Market Snap (at time of writing)

Market Wrap

A breach of $20k to the downside a couple of hours ago is not what we were looking for.

Occasional Series - Hello Mountains

Curious Cryptos’ Commentary – Binance and Iran

The CCC has often been critical of the lackadaisical approach towards rules and regulations taken by Binance, in an immature and selfish ethos and cultural tone determined by its CEO, Changpeng Zhao, whose preferred moniker as “CZ” amply demonstrates that he is not yet grown up enough to leave the playground on his own.

An example of his immaturity has been his personal insistence to date that Binance will not have a head office, a key prerequisite for any regulatory compliance. CZ revels in the fact that he runs the company from a series of hotel rooms around the world, giving him valuable experience of being on the move for the seemingly inevitable day when the Feds have finally had enough and decide to go after him.

There are now reports that following the reinstatement of US sanctions against Iran (whom we must all fervently hope never get their hands on a nuclear weapon) in 2018, Binance – contrary to public announcements – continued to service clients in Iran.

As BeInCrypto reported Asal Alizade, a trader in Tehran, told Reuters: “There were some alternatives, but none of them were as good as Binance. It didn’t need identity verification, so we all used it.”

Ouch.

Reuters also reported that “at least three senior Binance employees were aware that the exchange remained popular in Iran and was used by clients there” without naming those employees.

In the interests of fairness, Binance have recently been upping their game with respect to compliance issues and have been reported as seeking regulatory approval in a country or two.

However, if this story of circumventing US sanctions on Iran grows and has some real legs, that is very bad news for Binance, and very bad news for cryptos generally. This storyline will simply feed the inaccurate yet popularly known trope that cryptos are just for criminals and the like.

Curious Cryptos’ Commentary – Financial Stability Board (FSB) and regulation

The FSB comprises treasury officials and central bankers from the G20. It has announced that in October, it will present a report for the regulation of the crypto industry for the consideration of the G20.

It is perhaps no coincidence that this announcement follows hard on the heels of reports about Binance and its potential problems in Iran.

There are the usual howls of anguish from crypto maximalists who believe that cryptos should be entirely free of all regulation, but they can be safely ignored as living in cloud cuckoo land.

If the regulations do turn out to be draconian, then they will only be implemented by administrations that have a kneejerk revulsion to the blockchain revolution that will dramatically lessen centralised control over our lives.

Those countries that wish to attract vast amounts of crypto tax dollars will simply ignore the FSB recommendations, and get on with the important task of gaining regulatory competitive advantage.

But perhaps the FSB might come up with sensible proposals.

They can do no better than start by examining the EU’s own set of rules known as Markets in Crypto Assets (MiCA), a topic often discussed here in the CCC.