What happens if the world’s largest cryptocurrency exchange with around 75% of global market volume goes under?
To be perfectly clear, while there are plenty of issues at Binance, from its regularly undercollateralized stablecoins and mixing of user funds with its pegged wallets, to alleged money laundering, it’s not at all clear that the cryptocurrency exchange will collapse in a manner similar to FTX (if at all).
But here’s how things could potentially play out if Binance runs into trouble and what it could mean for traders who continue to run the gauntlet at Binance, should the world’s largest cryptocurrency exchange fail.
As the largest cryptocurrency exchange with an alleged daily volume in excess of US$15 billion, Binance is easily 10 times the size of its nearest competitor.
And even if volumes are falsified, if just a tenth of stated volumes are actual, that’s still US$1.5 billion worth of cryptocurrencies traded daily.
So how could operations at the world’s largest cryptocurrency exchange come to a sudden halt if at all?
1. Top Management Disappears
The recent U.S. Department of Justice action against obscure Russian cryptocurrency exchange Bitzlato should be seen as a shot across the bow for so-called “Binancians” (Binance patois for its users).
On January 18, the U.S. Justice Department charged Bitzlato’s co-founder and majority shareholder Anatoly Legkodymov, a Russian national living in China, with…
