Veteran trader Peter Brandt, who has over four decades of experience in the commodity and foreign exchange markets, has issued a stern warning against Binance, the world’s largest cryptocurrency exchange by trading volume. In a recent X post, Brandt called Binance and its native token Binance Coin (BNB) a “global scam” and a “cheap fiat”. He also accused Binance’s CEO Changpeng Zhao (CZ) of selling Bitcoin at a lower price on his platform to prop up the value of BNB, which has been declining amid regulatory pressures and partnership losses.
Brandt’s tweet was in response to another digital asset investor Mike Alfred, who pointed out the widening gap between the USD pairs of cryptocurrencies on Binance and other exchanges. This phenomenon, known as a “depeg”, indicates that cryptocurrencies are trading at a discount on Binance US, offering traders a better price than other platforms. However, most traders are unable to take advantage of this arbitrage opportunity, as Binance US has suspended USD deposits for nearly a month. Therefore, only users who already have USD holdings in their Binance wallets can buy the discounted cryptocurrencies.
Brandt compared the situation to the “popping of a bubble” and criticized CZ for running a “scam of the decade”. He also suggested that Binance was violating US sanctions by allowing users from Iran, Syria, Cuba, and other countries to access its services.
Binance faces mounting challenges from regulators and partners
Brandt’s tweet comes amid a backdrop of increasing scrutiny on Binance from regulators and partners around the world. The exchange has faced several challenges in recent months, including:
- The UK’s Financial Conduct Authority (FCA) banned Binance from conducting any regulated activity in the country and warned consumers about the risks of dealing with unregulated platforms.
- Japan’s Financial Services Agency (FSA) issued a warning to Binance for operating in the country without registration and urged investors to be cautious.
- Thailand’s Securities and Exchange Commission (SEC) filed a criminal complaint against Binance for operating a digital asset business without a license and soliciting Thai investors to use its services.
- The Cayman Islands Monetary Authority (CIMA) announced that it was investigating whether Binance was conducting activities that fall under its regulatory oversight.
- The Monetary Authority of Singapore (MAS) said that it was reviewing Binance’s application to operate in the country under the Payment Services Act and would follow up with appropriate actions if there were any breaches.
- Barclays, Santander, NatWest, and other UK banks blocked payments to Binance, citing customer protection and regulatory concerns.
- Clear Junction, a London-based payment processor, stopped facilitating GBP and EUR transactions for Binance, following the FCA’s ban.
- SEPA, the Single Euro Payments Area system that facilitates cross-border payments in Europe, suspended euro withdrawals and deposits for Binance customers.
BNB struggles to maintain its value amid market uncertainty
Despite the rising speculation in the crypto community, BNB, the native token of Binance, has managed to sustain above $233 at the time of writing. However, the token has lost over 30% of its value since June 2021, when the SEC filed a lawsuit against Binance and CZ for allegedly facilitating money laundering and violating securities laws. The token is also trading below its three exponential moving averages (EMAs) – the 10, 50, and 200-day EMAs – which are likely to act as resistance levels for BNB in its upward trend.
BNB is the fourth-largest cryptocurrency by market capitalization, with a current value of over $39 billion. The token is used to pay fees on the Binance platform, as well as to access various products and services offered by the exchange. However, with the growing regulatory hurdles and partnership losses faced by Binance, some analysts believe that BNB’s value proposition is diminishing and that the token could face further downward pressure.
