The Hidden Agenda: CFTC vs Binance
Hey! thanks for following me here from my Linkedin post about the current legal turmoil Binance is facing with the US Commodity Futures Trading Commission (CFTC). In this part of the article, I will discuss and give my opinion on what I think is really going on and why we’re seeing these issues popping up every now and then with Binance.
Brace yourselves, it might be dry reading. So let’s dive in!
As the world’s largest cryptocurrency exchange, Binance has been at the forefront of the crypto industry, driving innovation and providing a platform for millions of users to access digital assets. However, recent accusations and charges against Binance by US regulators have painted a negative picture of the exchange and its operations.
It is important to note that Binance has denied all allegations and is committed to complying with all regulations and laws in the jurisdictions where it operates. While the recent charges by CFTC have caused concern among some investors, it is important to remember that Binance has always been a pioneer in the crypto space, implemented robust measures to prevent illegal activity on its platform, and collaborated with regional authorities wherever required.
The witch hunt against Binance
In my mind, the connection is quite simple and is nothing more than a witch hunt. The accusations have come at a time when there is growing geopolitical tension between the US and China. The charges against Binance are part of a larger strategy by the US to target Chinese companies and prevent China’s rise to economic world dominance but more so these attacks are designed to secure the US Dollar’s position at the helm of the world economy.
Furthermore, Binance has been a key player in the democratization of finance, providing access to financial services to people who have been historically excluded from the traditional financial system. By allowing people to access cryptocurrencies and other digital assets, Binance is helping to level the playing field and promote financial freedom for all.
To go after a company like this especially after considering the circumstances, is nothing more than a witch hunt to me
— Logan King
Falling USD, Russia, Saudi Arabia, Chinese Yuan — The Perfect Storm
It’s no news that the US economy is in jeopardy. With rising inflation, unaffordability of everyday goods, and soaring energy prices it is quite clear that the US economy needs a new plan of action.
In my mind, the US government and many other countries are having a nose-stuck-up-against-the-glass kind of moment when it comes to cryptocurrencies. Where they’re like these kids who’re looking from outside the glass window with their noses on the glass pane, desperately wanting to get inside or get the thing that’s inside the glass window. In this case, the thing inside the glass window is the global decentralized cryptocurrency economy which is estimated to be over $1 Trillion.
On one front, there’s news of Russian president Vladimir Putin announcing that Russia will begin using the Chinese Yuan for international payments instead of the US Dollar. While on the other front, Saudi Arabia is in talks with Beijing to do the same thing. More importantly, the Saudis have shown interest in conducting their oil trade with the Chinese Yuan as the main settling currency instead of the US Dollar.
If this were to happen the US economy would be in major turmoil and their currency will devaluate fast! According to current estimates, the US Dollar represents more than 61% of the international foreign reserves and that’s majorly because of US’ political and economical dominance. If the Yuan were to be used as the settling currency, it wouldn’t be too long before Yuan is declared as the new world reserve currency.
Furthermore, the Saudis are in talks with Iran to consider an economic alliance with China and Russia and a possible membership in The BRICS bloc. The BRICS countries are a geopolitical bloc consisting of Brazil, Russia, India, China, and South Africa and are currently considered the leading rival to the G7 bloc of advanced countries in the world including the US. The G7 countries (Canada, France, Germany, Italy, Japan, United Kingdom, United States & The European Union) have a combined wealth of over $200 Trillion, while the BRICS have around $28 Trillion as of the latest World Bank data.
With the addition of Iran and Saudi Arabia to the bloc, the BRICS’ combined wealth would be boosted by an estimated $400 Billion & $900 Billion respectively, essentially totaling around an estimated $50 Trillion. With BRICS recently being keen on accepting new countries to be within its fold, even this figure would change and it wouldn’t be too long before the combined wealth of this bloc matches or even surpasses that of the G7 countries!
The domino effect from the Russia-China-Saudi deal, with the possible addition of Iran, and the possibility of the US Dollar losing the status of the world’s reserve currency would be a catastrophic rise in inflation for the US and a complete rebalancing of economic powers in the world. What’s even worse is that it may also affect the other countries in the G7 bloc and mess up their economies as well.
Consequences of such turn of events would be sky high inflation and if you think inflation is bad now, just wait! Raging Weimar Republic kind of inflation is awaiting the American economy.
— Monica Crowley (former US Assistant Treasury Secretary)
It is crucial to emphasize the immense impact that the world’s abandonment of the US dollar as the global reserve currency would have. For over half a century since World War II, the US dollar has been considered a secure haven, initially supported by gold until President Nixon ended the gold standard. Since then, the dollar has relied on the US’s economic prowess and strength, as well as the fact that oil has always been traded in dollars. Should this change, it would signify the end of the US dollar and quite possibly a degradation of the Superpower status for the US.
The Agenda: Controlling the Money
In all frankness, the policymakers at the white house are desperate right now and are finding novel ways to bolster the US Dollar. One sure-shot way to do that would be to get into the crypto game directly by issuing a state-controlled national digital currency — and I think this is the hidden agenda.
A United States central bank digital currency (CBDC) would be a digital form of the US Dollar of which there has been no commitment from the US government. But if they were to mint this CBDC one of the easiest places it could end up digitally would be on cryptocurrency exchanges. This is assuming that this proposed CBDC is a standard blockchain-based cryptocurrency.
When that happens, the US would want more control over it than any other entity, and what better way to exert control over this asset than controlling one of the most likely places it’ll end up getting traded at online?
Hence Binance.
The Opinion
So what’s my opinion on this whole circus?
I’m not exactly partial towards Binance, sure they have had their share of misadventures in flirting with regional regulators and they certainly have a long way to go considering that the crypto industry is still the wild west and no set standard regulations exist that can apply to an exchange that allows the trading of digital currencies without government intervention. However, considering all the recent scandals I mentioned in my Linkedin post involve not just the US but advanced economies such as the UK, Japan, Malaysia, etc. Then adding the fact that they are one of the largest cryptocurrency exchanges in the world with strong ties to Chinese businesses and quite possibly the current regime, Binance has simply painted a big red target on its back.
To conclude this discussion I’ll include one more opinion of another person here before I pen down my final words. This is someone whose opinion I value incredibly and he has a few interesting bites to say about the whole situation(s).
It is none other than Joel Kovshoff AKA Coach K whom I have had the pleasure of working with at Ethernity Chian.
I asked Coach about his opinion and this is how our conversation went..
If you couldn’t play the audio above then head over to this Soundcloud link
Well, that was Coach you can follow him and learn more from him from his Twitter handle Coachkcrypto, and his Youtube Channel
Finally in my opinion, despite the negative press Binance is getting because of these scandals, they are still as morally just as any other cryptocurrency exchange could aspire to be.
For instance, Binance has been proactive in implementing measures to enhance security on its platform and protect user funds for years now. When a recent hack occurred that resulted in the theft of $570 million worth of cryptocurrencies, it was a blow to the industry as a whole and not just Binance.
Binance’s implementation of SAFU, swift response to the incident and commitment to reimburse all affected users are a testament to its dedication to providing a safe and secure platform for users.
So knowing what we know, could Binance be complicit in all these scandals or at least some of them or is it just a witch hunt with a hidden agenda? You tell me! (in the comments below)