After the US Treasury Department and Binance agreed on a billion-dollar fine, the crypto industry was able to breathe a sigh of relief. What does this decision mean for Bitcoin, Ethereum & Co.?
• US Treasury Department and Binance agree on billion-dollar fine
• Crypto investors are becoming more optimistic again
• Bitcoin, Ethereum & Co. are increasing
The crypto industry has already had a turbulent history. There have been several high-profile collapses of crypto companies in the past year; recently, attention has been focused on the FTX scandal and the recent conviction of founder Sam Bankman-Fried. Most recently, the US criminal proceedings against Binance have been the focus of the crypto community. While Binance agreed to a $4.3 billion fine with the U.S. Treasury Department – the largest fine ever paid by a crypto company in Treasury history – founder and CEO Changpeng Zhao also settled a money route and the resignation of his position as head of Binance.
The fact that the criminal proceedings with Binance have now come to an end brought relief among crypto investors.
Crypto investors relieved
“It’s nice to wake up in the crypto space and not worry about what’s going to happen to Binance. 2024-2025 is going to be so great,” Yahoo Finance quotes an X post by Matt Hougan, chief investment officer at the crypto Asset manager Bitwise. The agreement between the US authorities and Binance ends “the potential systemic risk posed by a hypothetical collapse of Binance,” JPMorgan analysts wrote in a note. Michael Safai, partner at crypto trading firm Dexterity Capital, explained that the Binance deal “signifies a path forward for crypto and confidence that the asset class will not be displaced.”
Bitcoin, Ethereum & Co. are climbing
The movement in cryptocurrencies and stocks from the industry also reflected the optimism following the Binance ruling. For Binance itself, the amount of the fine was probably a shock at first – its own token Binance Coin fell by around 13 percent in response to the announcement to around 243 US dollars, but then recovered again. Binance Coin is currently at around $251.46.
The world’s largest cryptocurrency Bitcoin, however, climbed by around one percent to $37,796.70 after the announcement, before falling slightly again to $36,967.13. Ethereum, the second largest cryptocurrency, even rose by over four percent to $2,083.28. An Ethereum coin currently costs $2,004.87.
But it wasn’t just the popular cryptocurrencies that went up; the shares of Coinbase, another large crypto exchange, also rose by more than 3.5 percent in an initial reaction.
Crypto participants have recently expressed optimism that the industry could now see broader acceptance, reports Yahoo Finance. Crypto fans are now once again hoping for the approval of a spot Bitcoin ETF by the Securities and Exchange Commission (SEC). This allows investors to invest in the cryptocurrency without having to own it, Yahoo Finance explains.
Despite the euphoria, exercise caution
Despite the latest developments, caution is still advised. The SEC still has a number of lawsuits pending, and Binance now has to operate under massive state control. Yiannis Giokas, senior director of digital assets at Moody’s Analytics, calls it “the end of an era.” “As digital currencies become more mainstream and institutional players enter the space, regulations and enforcement are becoming stricter to ensure compliance and consumer protection,” Yahoo Finance quoted him as saying. According to him, the Binance deal with the US authorities marks “the same turning point that we have previously seen at the intersection of the dot-com and post-dot-com eras.”
While the full terms of the deal between Binance and the agency are not yet known, they are “likely onerous, robust and extraordinarily invasive,” Yahoo Finance quoted John Reed Stark, general counsel and former SEC prosecutor, as saying. According to him, this will also become “increasingly stressful, cumbersome and challenging” for Binance.
“Be prepared for a slower, more sustained pace of growth in crypto,” notes Dexterity’s Safai.
Editorial team finanzen.net
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