As The Bitcoin Price Crashes, This Major Crypto Exchange Has A Big Problem

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Fire in the hole ?

The cryptocurrency crash is continuing this morning despite a reprieve last night, setting up what’s likely to be a pain-filled week for traders and investors. Coindesk has attributed the latest sell-off to a Goldman Sachs warning the Federal Reserve could act harder and faster to rein in soaring inflation.

The bitcoin price dropped below $33,000 on some exchanges in the early hours of this morning but has since slightly recovered. Bitcoin is now down a further 5% on this time yesterday, taking its weekly losses to more than 20%. Ethereum is doing even worse, down 10% over the last 24 hours and with weekly losses of over 30%.

Ethereum rivals solana and cardano are leading the major market lower, down an eye-watering 18% and 12% respectively.

Now read this: U.S. president Joe Biden could issue a crypto executive order as soon as February

Binance’s big problem ?

The bigger they are… Binance, the world’s largest cryptocurrency exchange by volume that’s attracted the fury of governments and regulators around the world due to its rapid growth and relaxed attitude to oversight, has been accused of withholding information about its finances and corporate structure from regulators and performing weak money laundering controls, according to a comprehensive Reuters investigation published on Friday.

Treasure trove: The investigation is based on interviews with dozens of former employees of Binance, advisers and business partners, as well as hundreds of leaked internal documents. The report claims Binance has refused to answer regulators and partners’ questions about its operations and turned down German police requests to help track down fraudsters and terrorists.

Risk alert: In 2020, Binance acted against its own money laundering risk alerts for at least seven countries, according to Reuters. Specifically, the ratings for Russia and Ukraine were “manually” downgraded from “extreme” to “high,” such that the exchange could continue offering services there.

On the run: Binance, which is famous for its controversial corporate structure that eschews a traditional headquarters, has received multiple warnings about its operations from regulators around the world about its activities, including Germany, the U.K., Singapore, Japan, and the Cayman Islands. The investigation details how Binance has twice fled markets once its relationship with regulators soured, in Japan and Malta.

CZ pushes back: “FUD [fear, uncertainty and doubt],” tweeted Binance chief executive Changpeng Zhao after the investigation was published. “Journalists talking to people who were let go from Binance and partners that didn’t work out trying to smear us. We are focused on anti-money laundering, transparent and welcome regulation. Action speaks louder than words. Thank you for your unwavering support!”

Binance pushes back: Responding to the many claims, a Binance spokesperson said in a statement to Reuters: “As the leading cryptocurrency and blockchain ecosystem, we are both leading and investing in the future technologies and legislation that will set the crypto industry on the road to becoming a well-regulated, secure industry.” The spokesperson, without going into details, said Reuters’ information was “wildly outdated and—in several places—flatly incorrect.” Legal representatives for Binance said documents reviewed by Reuters were “partial and do not accurately reflect the full picture in relation to how decisions relating to very serious issues have been made by our client.”

Now read this: The titans of the metaverse have a bandwidth issue

Brutal crypto takedowns ?

? As the bitcoin and crypto market tanks, two takedowns of not only the Wild West crypto market but the entire concept of blockchain-based digital assets have been doing the rounds.

? On Friday, Jacobin published a 3,600-word story headlined Cryptocurrency is a giant Ponzi scheme while YouTuber Folding Ideas released a two-hour, 18-minute video titled The problem with NFTs. Folding Ideas’ video has now been viewed over 1 million times.

? The two assessments of crypto technology were widely shared on social media and highlight the strong backlash against bitcoin, crypto and NFTs from many as crypto expands beyond financial markets.

Good to know: South Korea wants to become the 5th-largest metaverse market by 2026

The week ahead ?️

? Look out for these cryptocurrency and crypto-adjacent events this week.

? Income tax filing season opens today amid warnings that the system may buckle under the weight of returns.

?️ Microsoft’s chief executive Satya Nadella will face questions on his company’s plan to buy Activision Blizzard in a deal worth $75 billion—and “provide building blocks for the metaverse”—when Microsoft reports its fourth-quarter earnings on Tuesday.

⚡ Elon Musk’s Tesla, which continues to hold around $1 billion worth of bitcoin on its balance sheet even after the company began dogecoin payment support this month, will report its fourth-quarter on Wednesday.

? Federal Reserve officials are meeting this week, culminating with a press conference on Wednesday afternoon. While no major announcements are expected, investors will be pouring over any snippets of information from Fed chair Jerome Powell on interest rate hikes, inflation and the economy.

? iPhone maker Apple will follow with its latest earnings on Thursday. Apple briefly became the world’s first $3 trillion company this month before its shares were knocked by a wider sell-off of technology stocks.