Binance CEO Changpeng Zhao has claimed that the company “does not own any equity” in Zanmai Labs, the parent company of Indian crypto-exchange WazirX. This, a day after India’s Enforcement Directorate (ED) froze WazirX’s bank balances worth $8 million earlier.
According to a statement, ED has been investigating WazirX since last year for its alleged role in a money laundering scheme. On 5 August, ED conducted searches on WazirX Co-founder and CTO Sameer Mhatre after suspicions emerged about links to Chinese loans apps.
Floodgates are wide open
Binance has been called into question since the legal probe began after CZ denied the acquisition of WazirX. In fact, CZ claimed on Twitter that the acquisition of WazirX “was never completed.”
Worth pointing out, however, that this acquisition was announced way back in November 2019. A later tweet from CZ confirmed the purchase, with the exec distinctly stating “Binance-owned Indian crypto exchange WazirX…”
» Binance-owned Indian crypto exchange WazirX crosses $200m in daily trading volume; eyes $1b in 2021 – The Financial Express https://t.co/t3GD7UwvYt
— CZ 🔶 Binance (@cz_binance) April 5, 2021
On the contrary, his latest four-part post denied this, with CZ arguing that Binance is a target of “incorrect reporting.”
“On 21 Nov 2019, Binance published a blog post that it had “acquired” WazirX. This transaction was never completed. Binance has never – at any point – owned any shares of Zanmai Labs, the entity operating WazirX,” said Changpeng Zhao.
On the other hand, WazirX founder Nischal Shetty has refuted CZ’s claims in his own posts on Twitter. Shetty alleged,
“1/ FACTS about WazirX & Binance: WazirX was acquired by Binance Zanmai Labs is an India entity owned by me & my co-founders Zanmai Labs has license frm Binance to operate INR-Crypto pairs in WazirX Binance operates crypto to crypto pairs, processes crypto withdrawal…”
Not the first legal battle
Binance is no stranger to legal battles as it has been accused of legal wrongdoing multiple times. As per Bloomberg, investigations into Binance have broadened to look at potential insider trading and market manipulation.
In fact, a Philippines-based think tank claimed that Binance is a “risk to the public” earlier in July. A new lawsuit has been filed against the organization for allegedly misrepresenting TerraUSD, a stablecoin. Earlier in July, developer “CryptoFelon” claimed that Binance CEO Changpeng Zhao is attempting to “rob him of his domain.”
USDT volume on exchanges up 20% in 3 months
USDT volume on exchanges up 20% in 3 months Oluwapelumi Adejumo · 6 mins ago · 2 min read
According to Santiment, the high percentage of Tether on exchanges is a sign of 2-year high buying power in the market.
2 min read
Updated: August 10, 2022 at 11:24 am
Cover art/illustration via CryptoSlate
The ratio of Tether (USDT) on exchanges is up 20% in the last three months, according to Santiment data.
📈 The ratio of #Tether on exchanges has gone from 19.7% on May 9th to a whopping 42.0% three months later. This can be viewed as both a signal that traders have taken profits as prices have rebounded, as well as a sign of a 2-year high in buying power. https://t.co/Xmscnu5NOb pic.twitter.com/UFuYAkrWlO
— Santiment (@santimentfeed) August 10, 2022
The market intelligence platform tweeted that the ratio went from 19.7% on May 9 to 42% as of August 10. It is the first time USDT supply on exchanges will increase to over 42% since April 2020.
According to Santiment, this is a sign of 2-year high buying power and also shows that traders have taken profits as the crypto markets rebounded.
In the last three months, USDT’s supply declined as investors redeemed the token during the thick of the bear market. The stablecoin issuer revealed it redeemed as much as $14 billion within two weeks.
Meanwhile, Tether resumed minting on July 29 and has added a few billion to its market cap since. Many in the crypto community consider an increase in the stablecoin supply to be a bullish signal.
💵 💵 💵 💵 💵 💵 💵 💵 💵 💵 1,000,000,000 #USDT (1,001,883,610 USD) minted at Tether Treasuryhttps://t.co/J7058h3uuw
— Whale Alert (@whale_alert) August 3, 2022
Binance CEO Changpeng Zhao said in a recent tweet that “3 of the top 10 (cryptocurrencies) are stablecoins, meaning there is a lot of “fiat” sitting on the sidelines, ready to get back in. If people wanted to get out of crypto, most wouldn’t hold stablecoins.”
3 of the top 10 are stable coins, meaning there is a lot of “fiat” sitting sidelines, ready to get back in.
If people wanted to get out of crypto, most won’t hold stablecoins. https://t.co/QONyq1894U
— CZ 🔶 Binance (@cz_binance) July 31, 2022
CryptoSlate research revealed that over $40 billion of stablecoin “dry powder” is waiting on the crypto market’s sidelines.
However, Blockware analyst Will Clemente holds a different opinion. In his view, there should be fewer stablecoins in the market as the oversupply and absence of buyers could cause the crypto market to decrease.
IMO this is the most compelling chart in crypto:
When large amounts of stablecoins are on the sideline relative to crypto’s mkt cap, market participants have to chase the rally higher. When there’s a lot of stables deployed but no one left to buy, market runs out of new buyers. pic.twitter.com/PUhVx6Gakw
— Will Clemente (@WClementeIII) July 19, 2022
He believes that if the volume of a stablecoin in circulation declines, the demand for crypto assets rises.
While there might be slightly different opinions on what the high supply of stablecoins might mean for the crypto market, Ethereum (ETH) users will at least have nothing to worry about post-Merge.
The two largest stablecoin issuers have confirmed they will only support Ethereum PoS after the merge to avoid disruption to the community.
Dozen Crypto Companies Await Portugal License Despite Bank Account Closures
The central bank of Portugal is now reviewing 12 requests from businesses that want to provide crypto-related services in the country. The applications are pending decision amid recent reports that some commercial banks are closing accounts of already approved operators.
Binance Among Cryptocurrency Platforms Seeking Authorization in Portugal
Portugal’s monetary authority is currently evaluating requests submitted by 12 entities that intend to offer Portuguese clients services for virtual assets, Dinheiro Vivo unveiled. The crypto firms need a license from Banco de Portugal (BdP) to work in the country, still considered one of Europe’s most crypto-friendly jurisdictions.
Final decisions on the applications are expected by the end of the year. That’s unless the regulator asks the companies to provide additional information, in which case the deadline could be moved to 2023, the Portugal News English-language portal reported, quoting the business news outlet.
Among the applicants to enter the Portuguese crypto market is Binance, the world’s largest cryptocurrency exchange by trade volume. The digital currency trading platform has started to recruit talent in the country, having posted six vacancies on its Portuguese page, even though it’s still waiting for a green light from the BdP.
Criptoloja, Mind the Coin, Digital Luso, Utrust, and Bison Digital Assets are the five crypto brokers that are already operating in Portugal. The new requests are an indication that the nation’s crypto industry is developing and is likely to soon grow to a total of 17 registered exchanges.
At the same time, crypto companies are also facing certain challenges. A report recently revealed that major Portuguese banks are closing their accounts or refusing to open new ones, which is hindering normal business activities in the sector.
According to an article published by Jornal de Negócios and quoted by Bloomberg, the banks Caixa Geral de Depósitos, BCP, Santander, Abanca, and BiG are shutting down the accounts of four of the five digital asset managers.
In a statement, the Bank of Portugal said it’s monitoring the problem but also pointed out that its competences, when it comes to crypto assets, do not extend to “areas that go beyond the prevention of money laundering and the financing of terrorism.” The financial authority elaborated:
The decision to open or maintain bank accounts depends, in these cases, on the risk management policies that each banking institution intends to undertake.
The situation may bring bad publicity to Portugal which had established itself as a crypto-friendly jurisdiction in the past few years. The EU member state attracted many crypto enthusiasts with its zero-percent tax on crypto gains, affordable living costs, and mild Mediterranean climate, especially during the Covid-19 pandemic.
Tags in this story
accounts, authorization, Banco de Portugal, Bank of Portugal, banks, BdP, Binance, Brokers, Central Bank, Crypto, Cryptocurrencies, Cryptocurrency, Exchanges, License, Portugal, Portuguese
Do you think Portuguese banks will change their attitude towards crypto businesses if Banco de Portugal approves more operators in the sector? Share your thoughts in the comments section below.
Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Is Litecoin’s addition to Binance DeFi staking a double-edged sword
Litecoin is gradually recovering from the heavy discount it received in the last few months. It might take a while for the market to recover to previous highs.
Holders can still earn some passive income as they wait for the recovery. But is this really a healthy option in light of the recent market events in May?
The Terra UST crash was the biggest eye opener to the dangers that might be associated with staking. DeFi staking and lending platforms have been put to the test by the latest bear market and some cracks have been exposed.
This is why there were mixed reactions when it was revealed that Binance has included LTC into its DeFi staking facility.
In a recent announcement: @binance DeFi Staking has added support for Litecoin!
Users can now “stake” their $LTC, starting Aug. 3, and earn up to 1.40% APR in rewards.
— Litecoin (@litecoin) August 3, 2022
One respondent noted that the move would make it easier to short LTC. This means LTC’s price action will likely end up being subdued.
Some feel that the low API offered in the facility might not be encouraging enough to persuade people to take the risk. Especially, considering the risks associated with having crypto on centralized exchanges.
How will the move affect Litecoin?
Such low yields will only make meaningful returns for investors that stake large amounts of crypto.
However, the low yield might also not be appealing to whales. However, if the staking pool receives a healthy amount of capital, then this might have an impact on the demand. Shorting opportunities might also result in more volatility for the cryptocurrency.
The announcement comes at a time when Litecoin’s demand has increased. Both the total addresses and new addresses holding LTC have increased in the last three weeks.
Despite this uptick, LTC’s dormancy metric demonstrated significant activity during the last three to four weeks.
The metric had its biggest spike after the mid-month rally in July.
It also had another spike in activity at the end of July, after another substantial price uptick.
The price has been downward since then, and this is consistent with outflows or profit-taking.
The charts highlight the increased demand for Litecoin, which might be a sign that it is flowing out of exchanges.
The move by Binance might be aimed at encouraging LTC holders to keep their coins in the exchange. However, the low staking yield may not be attractive, especially to the regular Litecoin investor but this might be a different case for whales with large balances.
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