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SEC Confirms Binance CEO Supporting Something Sketchy

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Six months ago, the United States-based platform of Binance, the largest crypto exchange according to trading volume, Binance.US, was in a difficult situation.

It was short of USDT (Tether), the most sought-after stablecoin on the cryptocurrency market.

The scarcity was extreme to the extent that USDC (another popular stablecoin) and USDT withdrawals had to be halted for long hours.

This particular move raised concerns among customers of Binance.US.

Considering that the trading volume which USDT represents on the US-based Binance is huge, the lack of liquidity is a serious issue.

Moreover, not only did the problem suspend a large part of trading activities, but it also led to questions related to the exchange’s reliability and solvency.

READ ALSO: Changpeng Zhao Binance CEO Receives Summons from US Court

However, just as the situation became alarming, huge USDT deposits started flowing in, thereby replenishing the depleted wallets of Binance.US.

Today June 8, a clearer view of the mysterious replenishment of the Binance.US depleted funds has been revealed.

The United States SEC (Securities and Exchange Commission) has established that the funds for the replenishment came from Sigma Chain.

The cash infusion, which made Binance.US liquid again, was donated by the Chain.

This company is founded by CZ (Changpeng Zhao), the CEO of Binance.

Is there a Hidden Motive behind CZ’s Actions?

The move made by Changpeng Zhao may look like only offering assistance at the time the company was facing a liquidity crisis.

However, viewing the action from a regulatory standpoint raises much concern.

The reason is that if a large sum of an exchange’s liquidity comes directly from the CEO’s money, it may lead to possible manipulation and a clash of interests.

In addition, the exchange having to rely on the personal assets of its CEO can instigate doubts concerning its financial stability.

Indeed, the affair didn’t negatively impact the daily operations of Binance.US during that time.

But it revealed possible gaps within the company’s operational resilience.

The question now is, what will the exchange do if the market conditions suddenly turn unfavorable again?

Is Changpeng Zhao ready to offer assistance to the US-based exchange again?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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