The recent crackdown by the United States Securities and Exchange Commission (SEC) has had a severe impact on Binance’s operations. The crypto exchange reportedly terminated over 1,000 employees and reduced certain benefits in response to the challenging market environment and regulatory climate, which led to declining profits. Binance has expressed the possibility of further cuts in various aspects of its business in light of these concerns.
While facing 13 charges brought by the SEC and under investigation by the U.S. Justice Department, Binance remains the most popular centralized crypto exchange globally, holding assets worth over $63 billion. Despite the uncertain outlook, the majority of assets held in Binance include Tether (USDT), Bitcoin (BTC), BNB (BNB), and wrapped Ether.
In his remarks on Binance’s anniversary, the CEO Changpeng Zhao acknowledged the company’s journey as “never all smooth sailing.”
This week’s Crypto Biz highlights Binance’s ongoing efforts to combat declining profits, Ripple’s anticipation of U.S. banks potentially adopting XRP, and the first signs of venture capital returning to the crypto market.
A Ripple Chief Legal Officer (CLO) suggests that a court ruling in favor of the company could serve as an incentive for banks to consider adopting XRP.
Stu Alderoty, the Chief Legal Officer of Ripple Labs, believes that U.S.-based banks may show interest in utilizing XRP for cross-border transactions following a recent court ruling. He expressed his hopes that this quarter will witness significant conversations with customers in the United States, and some of these discussions might lead to tangible business partnerships.
The removal of the “security” label from XRP after the court ruling could breathe new life into partnerships between Ripple and banks, which may have been dampened by the SEC lawsuit. Notably, Bank of America had previously shown interest in the blockchain firm back in 2019, and American Express had established its first partnership with Ripple in 2017.
Binance trims employee benefits due to a reported “decline in profit.”
In response to ongoing reevaluation efforts, Binance, the global cryptocurrency exchange, is implementing cutbacks on certain employee benefits. The company has ceased reimbursing employees for specific expenses, such as mobile phones, fitness, and working from home. Binance attributed these cost-cutting measures to the “current market environment and regulatory climate,” which resulted in a decline in profits. The decision comes after a significant layoff in June, affecting over 1,000 exchange employees. Additionally, Binance and its CEO, Zhao, faced legal actions by the SEC, accused of allegedly offering unregistered securities in the United States.
Marathon shareholders have filed a lawsuit against the company’s top management.
Crypto mining company Marathon Digital is facing a legal battle as its CEO, Fred Thiel, and other top executives are accused of breaching fiduciary duties, engaging in unjust enrichment, and squandering corporate assets. The complaint alleges that the company’s management downplayed its issues, artificially inflated Marathon’s valuation, received excessive compensation, executed lucrative insider sales, and obtained unwarranted bonuses based on deceptive and misleading statements.
Polychain Capital and Coinfund have successfully raised $350 million for their new cryptocurrency funds.
Amidst a resurgence of interest in the crypto industry, Web3 venture firms are preparing for new investments in crypto projects. Polychain Capital has successfully raised $200 million for a new investment fund and is aiming to secure a total of $400 million. The firm currently operates three funds, managing approximately $2.6 billion in assets.
Meanwhile, Coinfund initially set a target of $125 million for a seed fund but managed to exceed expectations by raising an additional $27 million, reflecting the growing enthusiasm in the market.
However, the overall volume of venture funding for crypto startups has experienced a significant decline of 76% year-over-year, mainly attributed to the bear market and turbulence in the industry.
Mark Yusko predicts that the ongoing Bitcoin rally will culminate in a “speculative blow-off top” by 2024.
Mark Yusko, the chief investment officer and founder of Morgan Creek Capital, believes that BlackRock’s application for a spot Bitcoin exchange-traded fund (ETF) has initiated the start of a new crypto bull market. He predicts that this bull market will experience a parabolic rise closer to the halving event scheduled for April 2024.
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