Riding The Wave News Summary 105
Crypto Giant Binance Offers Little Transparency After FTX Collapse, Bitcoin Addresses Tied to Defunct Canadian Crypto Exchange QuadrigaCX Wake Up, & more.
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Crypto Giant Binance Offers Little Transparency After FTX Collapse
Bitcoin Addresses Tied to Defunct Canadian Crypto Exchange QuadrigaCX Wake Up
DeFi Project Popsicle’s ICE Token Triples as Controversial Wonderland Founder Returns
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Crypto Giant Binance Offers Little Transparency After FTX Collapse
The collapse of the crypto exchange FTX has triggered calls for transparency in the industry. To many investors, the industry’s biggest player, Binance, remains a black box.
Crypto exchange Binance processes more transactions than most of its rivals combined, accounting for roughly half of crypto spot trading and two-thirds of derivatives trading, according to the research firm CryptoCompare.
Like FTX, Binance discloses limited financial information. It doesn’t say where the company is based. And its founder, Changpeng Zhao, is affiliated with market makers providing liquidity on its own platform, an arrangement some market observers say leads to a potential conflict of interest.
“Does the exchange give preferential treatment to an affiliate? Is the exchange supporting an affiliate with customer money? These questions concern customers and the regulators who try to protect them,” said Larry Harris, a finance professor at the University of Southern California’s Marshall School of Business and former Securities and Exchange Commission chief economist.
Adding to investor worries, an outside audit firm that Binance brought in to report on its reserves recently said it was suspending its work for crypto firms.
Binance.US told the Journal at the time that the exchange had robust data protection and that U.S. customer data was stored on servers in the U.S.
“Binance does not operate in China nor do we have any technology, including servers or data, based in China,” Mr. Hillmann said.
The SEC was examining the relationship between Binance.US and two trading firms with ties to Mr. Zhao, the Journal previously reported. The firms serve as liquidity providers for the platform, and while Binance says on its U.S. website that affiliated market makers might trade on the exchange, it doesn’t name which firms might do so.
Mr. Zhao acknowledged that he is an investor and shareholder in one of Binance’s market makers. But he said that the sole purpose of that entity, which he didn’t name, is to provide liquidity and that it doesn’t make profits. “We are not trying to make money from trading ourselves,” Mr. Zhao said.
Bitcoin Addresses Tied to Defunct Canadian Crypto Exchange QuadrigaCX Wake Up
More than 100 bitcoins tied to the defunct Canadian crypto exchange QuadrigaCX were transferred out of cold wallets thought to be beyond anyone’s control over the weekend, after sitting dormant for more than three years. The company's bankruptcy trustee, Ernst and Young, did not initiate the transfers, CoinDesk has learned.
QuadrigaCX went bankrupt in 2019 after the apparent death of founder and CEO Gerald Cotten. At the time of its collapse, Quadriga was believed to have owed thousands of customers nearly $200 million in various cryptocurrencies – a staggering failure for what was once Canada’s largest crypto exchange.
EY, which is acting as the trustee for Quadriga’s estate, announced in February 2019 that it lost control of about 100 BTC after mistakenly sending the coins to Quadriga-operated cold wallets that the Big Four financial services firm said it couldn’t access. At the time, the bitcoin was worth around $355,000 (C$470,000).
DeFi Project Popsicle’s ICE Token Triples as Controversial Wonderland Founder Returns
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