The chief executive officer of Binance, Changpeng ‘CZ’ Zhao made an announcement for the crypto space. He disclosed that the crypto exchange will be conducting its 15th burn of Binance coins (BNB) in a month. This answer was revealed when someone made a query about it on Twitter and asked about the next BNB burn and the CEO decided to respond. This announcement really does make things interesting because it is quite well-known that burning the supply of a cryptocurrency means that you lessen the total possible number of cryptocurrencies as a way to boost demand and is often done by people for ensuring price power.
What made this interesting is the fact that recently, Binance’s BNB tokens have nosedived and their price has suffered from a decline of 14%, as it moved from $288 to $247. The primary reason behind this fall in price is that Binance has been under investigation by the CFTC i.e. the Commodity Futures Trading Commission. To put it simply, the government watchdog is investigating whether the crypto exchange intentionally enabled citizens of the United States to participate in the global crypto exchange. However, it is important to note that the CFTC has not filed any official claim regarding any wrongdoing conducted by Binance.
As is the norm, the news of the CFTC investigating Binance was mostly twisted up by most of the major news outlets, even though it is not as convoluted as they made it sound. Nonetheless, it should also be noted that this doesn’t mean that the crypto exchange is completely in the clear because it is still under investigation by the CFTC, something that shouldn’t be taken lightly. But, so far, no accusation has been made against Binance. Moreover, it didn’t take long for the Binance coin to recover from its price crash either and it gradually began to climb up once more.
Last year in March, when the coronavirus had begun to hit the world and had officially been declared as a global pandemic, the price of Binance Coin had gone down to as low as $6.4 on March 12th, 2020. If you compare the price that day and the same date this year, it is apparent that Binance Coin seems to be doing quite well because it is trading at more than 40 times the crushing low price. As far as the investigation by the CFTC is concerned, it is not really surprising when it comes to Binance.
The exchange has had an ongoing issue of keeping out US investors from its primary exchange and restricting them to Binance US, which is the platform designed for US citizens. However, the investors are more interested in the global platform because it has so much more to offer. Hypothetically speaking, the exchange would benefit a great deal if US investors were to sneak onto its global arm. It is indeed possible to bypass the measures and the opportunities are enough motivation for those who want to make a profit.
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