21st September 2021 > > Binance.

tl;dr

Changpeng Zao, CEO of Binance, should step aside now.

Market Snap

Market Wrap

Away from BTC, funding rates for perpetual futures show a growing short base in alts. With the ongoing drama at Evergrande, one should expect short bases across all risk assets. S&P – rather belatedly as always – has now publicly identified Evergrande as being at risk of default. You don’t say.

Much like technical analysis, ratings agencies are only ever backward looking – they provide no useful information about the future. Much like technical analysis, the ratings agencies really are a waste of everyone’s time and energy.

On 18th September 2021 the CCC said this:

“Barring an equity disaster, or UST sell-off another breach of $50k must surely be on the cards in the next couple of days.”

Ho hum. We have the equity disaster and so that breach of $50k will have to wait until after the dust settles.

Occasional Series – Washing your hands

At a nursery school next door to CCC towers, I heard this song yesterday afternoon:

“If you are happy and you know it, wash your hands.

If you are happy and you know it, wash your hands.”

Etc etc. You know how the original goes.

I know kids who have been unfairly made to feel so scared by a virus that is so unlikely to hurt them in any way. The restrictions put upon these kids mean they are not able to fully enjoy their childhood. They are not developing emotionally, they are not developing socially, and they are not developing intellectually to the degree they would otherwise achieve if we all just got on with life (and death too, cos, you know, it happens).

This is not fair on anyone not of our generation (let us say anyone below the age of 30, I comment hopefully …)

These pre-school children are now singing a bastardised version of what was once a great children’s song.

I must admit I am upset by this.

Curious Cryptos’ Commentary – Binance

As previously reported, Binance has had several run-ins with regulators all over the world, including the US, UK, Netherlands, Thailand, Japan, Germany, and Hong Kong amongst others.

The complaints levied against Binance differ from jurisdiction to jurisdiction, but they all have a common cause, which is this.

Binance CEO, Changpeng Zhao, is a child.

He hails from that part of the crypto community that continues to believe that cryptos are here purely to destabilise and replace current financial systems, which is a perfectly acceptable opinion to have.

Unless you are CEO of one of the biggest CENTRALISED crypto exchanges in the world.

He refuses to bow to the most basic requirements of legislators and regulators worldwide – the need to have a central head office to allow for effective regulation.

He takes pride in the fact that he himself does not have an office, but only works out of hotel rooms.

He takes pride in being called CZ, as if having a nickname ranks him higher in the school playground.

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To be fair, Zhao has made some noises about growing up and treating Binance like a real business.

He appointed former Comptroller of the Currency, Brian Brooks, as CEO of Binance US. This was a direct nod to the SEC and should have heralded the start of a regulatory revolution within Binance.

Instead, Brian resigned after just three months citing “differences over strategic direction”.

We all know exactly what he meant by that comment.

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This lack of leadership from the very top in terms of adhering to legal rules and norms is bound to impact upon employees’ behaviour.

Binance US is under a new investigation for insider trading and front-running customer orders.

In the world of finance, few accusations come bigger than that.

Don’t get me wrong – Binance is the second of my two favoured exchanges, the other being Coinbase. The interface is easy to understand and use, and the product offering is rarely found wanting. Between 5% & 10% of my crypto portfolio is held at Binance, with a similar amount at Coinbase, to allow for rapid portfolio adjustment if required.

The last thing I want to see is ongoing problems at Binance.

Reputational risk should be at the forefront of senior executives’ thinking but I doubt Zhao has even heard the term.

For his own good, and that of his employees and customers, he should stand aside to allow someone with experience to take his firm forward.

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I do hope he takes careful note of today’s CCC.