Changpeng Zhao (aka CZ), the Chief Executive of the world’s largest crypto exchange, Binance, took to a familiar strategy when news broke that the U.S. Securities and Exchange Commission (SEC) is suing the exchange: tweeting. CZ’s first Twitter communiqué was just the number 4, which in his own words means ignore FUD, fake news, attacks, etc. In the days since the lawsuit was announced, Binance has stuck to its long-held talking points: the SEC is wrong for regulating by enforcement; customer funds are and always have been safe; and the exchange’s previous attempts of coming into compliance were thwarted by an uncooperative SEC. While we take the SEC’s allegations seriously, they should not be the subject of an SEC enforcement action, let alone on an emergency basis. We intend to defend our platform vigorously, Binance said.
Experts are now seriously wondering whether Binance will survive as a brand. Tarun Chitra, the CEO of Gauntlet, suggested that outflows have been slow because users globally, like your average hodler in Chile or Abu Dhabi, simply are not concerned about what’s happening with Binance and the U.S. For many, Binance is the most trustworthy option when it comes to crypto exchanges, which is why it has grown to be the largest crypto exchange, and by a longshot.
Jake Chervinsky, the CEO of the Blockchain Association, said that there’s a pathway for Binance where, even if it loses the SEC suit, it still won’t have to register as a securities exchange. Instead, it would do what it’s been doing since a former Binance executive was booked for insider trading, and delist only the tokens proven demonstrably to be securities.
Binance may be forced to institute expensive controls that also sweep out a number of potential users, and Binance.US may be doomed. But there’s an army of people speaking CZ’s language, willing to ignore fake news, uncertainty and doubt. So here’s another four words: can’t kill an idea.