Binance

Sequoia Capital has sued Zhao Changpeng, founder of Binance, for breaching an exclusivity agreement.

According to a report by Bloomberg, Sequoia Capital filed suit against Zhao Changpeng on April 24th, 2018. The filings reveal the interactions Zhao and Binance had with some of the most prominent venture capital firms in finance.

There are many remarkable growth stories in the cryptocurrency industry, but Zhao and Binance’s meteoric rise is likely the current pinnacle. Zhao has become a cult figure in the industry, gracing the covers of popular tech magazines such as Forbes and amassing a personal fortune which he values at $2 billion.

Zhao and his company have not only attracted popular finance magazines from all parts of the world, they have also drawn scrutiny from regulators.  Citing claims that they may be disregarding securities laws, regulators have been clamping down on crypto exchanges worldwide.

According to the Bloomberg report, Zhao and Sequoia Capital began negotiating terms for an investment in Binance in August, which would have given Sequoia an 11% stake in the exchange and valued Binance at about $80 million.

Talks advanced for some months, in which time prices of cryptocurrency also soared to all-time highs. However, negotiations between the two parties broke down in mid-December, around the time that Bitcoin peaked at a record $20,000 exchange rate.

On the 14th of December, Zhao’s team told Sequoia that Binance’s existing shareholders felt their offer hugely undervalued Binance.

From the Bloomberg report:

Around the same time, Zhao was approached by another Venture Capitalist firm, IDG Capital, with an offer that valued Binance at a higher valuation of $400 million and $1 billion respectively, after the injection of two rounds of funding.

The issue in court now is whether Zhao’s talks with IDG Capital violated the exclusive agreement he signed with Sequoia. While Sequoia and Zhao have been trying to settle their dispute through arbitration, the case became public when Sequoia secured a temporary injunction to bar Zhao from talking with other investors.

 

fake news

“Fake news” — that’s how Binance responded to reports that the cryptocurrency exchange giant is preparing to add USD trading pairs to its online trading platform.

The Hong Kong-based exchange, which is currently in the process of moving its operations to Malta, said Thursday that while it is holding discussions with banks in the hopes of adding fiat-to-cryptocurrency trading pairs in the future, it has “no plans” to support USD in the short-term. Nor, when it does offer fiat pairs, will verge (XVG) or ripple (XRP) receive preferential treatment.

That statement, straight from the Twitter account of Binance CEO Changpeng Zhao, contradicted baseless reports from several industry media outlets that claimed the exchange had announced that it was adding XRP/USD and XVG/USD trading pairs to its platform.

Part of the confusion may also stem from the fact that Binance has gradually been rolling out USDT trading pairs for altcoins that are listed on its platform. Better known as ‘tether‘ and created by a company of the same name, USDT is a cryptocurrency token that is supposedly backed by physical dollars at a 1:1 ratio. However, USDT holders cannot withdraw dollars directly to their bank accounts, nor can they deposit actual USD at Binance.

Binance currently ranks as the world’s highest-volume cryptocurrency exchange, with daily volume in excess of $2.1 billion. Consequently, getting listed on Binance increases a coin’s liquidity and generally leads to positive price movements — at least in the short-term.

Becoming one of the few coins to trade directly against fiat currency pairs has an even more profound effect on a cryptocurrency’s price, as it allows the coin to decouple from bitcoin and ethereum and trade in an isolated market.

It’s impossible to know the justification behind spreading these false rumors, though it would not be surprising if at least some of the perpetrators did so to artificially inflate the verge and ripple prices so that they could turn a quick profit.

Featured Image from Pixabay

bitcoin exchange

Today, New York Attorney General Eric T. Schneiderman initiated the Virtual Markets Integrity Initiative, a reality discovering investigation into the arrangements and practices of platforms utilized by purchasers to exchange virtual or “crypto” monetary forms like bitcoin and ether. As a component of a more extensive push to secure cryptographic money speculators and purchasers, the Attorney General’s office sent letters to thirteen noteworthy virtual cash exchanging platforms asking for key data on their activities, inside controls and defends to ensure client resources.

The attorney general is asking for data on the platforms’ activities, inside controls, and safeguards to ensure client resources, as per an announcement from Schneiderman’s office. “As the letters explain, the initiative seeks to increase transparency and accountability as it relates to the platforms retail investors rely on to trade virtual currency, and better inform enforcement agencies, investors, and consumers,” Schneiderman said in a statement.

Platforms

The Investor Protection Bureau of the Office of the Attorney General sent letters to the following virtual currency trading platforms:

The initiative, in which the attorney general’s office sent letters to 13 virtual cash exchanging stages, tries to expand straightforwardness and responsibility as it identifies with the online offices that retail speculators depend on to exchange virtual money and better educate requirement offices, financial specialists, and shoppers.

Virtual Markets Integrity Initiative Questionnaire

The letters sent to the platforms include the questionnaire. It comprised of following sections:

  • Ownership and Control
  • Basic Operation and Fees
  • Trading Policies and procedures
  • Outages and Other Suspensions Of Trading
  • Internal Controls
  • Privacy and Money Laundering
  • Protection against Risks To Customer Funds
  • Written Materials

“With cryptocurrency on the rise, consumers in New York and across the country have a right to transparency and accountability when they invest their money. Yet too often, consumers don’t have the basic facts they need to assess the fairness, integrity, and security of these trading platforms,” said Attorney General Schneiderman. “Our Virtual Markets Integrity Initiative sets out to change that, promoting the accountability and transparency in the virtual currency marketplace that investors and consumers deserve.”

binance header image

Binance has been making headlines nonstop over the past few weeks, first due to a hacking attempt, then over their bounty program, followed by the announcement of a decentralized exchange (DEX) version of Binance. Most recently, though, news from Japanese financial newspaper Nikkei reported that Japan’s Financial Services Agency (JFSA) would serve Binance with a compliance warning – a report that Binance CEO Changpeng “CZ” Zhao called “irresponsible journalism.”

Later, Zhao confirmed via Twitter that Binance was indeed served with a “simple letter” from the JFSA and would “find a solution.” Zhao, an often-imitated and highly respected figure in the cryptocurrency space, headlining Forbes list of richest people in crypto, may have been teasing the company’s next big news via a Chinese proverb: “New (often better) opportunities always emerge during times of change.”

One such (possibly better) opportunity has emerged as Binance is seeking to open an office in the Mediterranean country of Malta. CZ told Binance in an interview with Bloomberg that he’s “very confident” the world’s biggest cryptocurrency exchange by volume (according to CoinMarketCap data) will be able to announce a partnership with a Malta-based bank with the goal of launching a fiat-to-cryptocurrency exchange in the European island nation.

The move to Malta comes as the country aims to become the “global trailblazers in the regulation of blockchain-based businesses and the jurisdiction of quality and choice for world-class fintech companies,” according to the Prime Minister of Malta, Joseph Muscat.

Binance appears incredibly confident in their collaboration with Malta, making an investment in the country. In a separate post on Binance’s blog, Zhao said:

“After meeting with Parliamentary Secretary, Mr. Silvio Schembri, we were impressed by the logical, clear and forward-thinking nature of Malta’s leadership. After reviewing a proposal bill, we are convinced that Malta will be the next hotbed for innovative blockchain companies and a center of the blockchain ecosystem in Europe. Binance is committed to lending our expertise to help shape a healthy regulatory framework as well as providing funds for other blockchain start-ups to grow the industry further in Malta.”

While the banking partnership announcement hasn’t been made, and there’s been no word if Binance intends to continue its operations in Hong Kong where it’s currently based – but has been experiencing pressure from key regulators in the territory – Binance’s intentions in Malta have been widely publicized and the plan appears to be moving full steam ahead.

With Binance already having generated $200M in revenue in its second quarter since opening, having achieved the highest-volume in transactions of any crypto-exchange, and having become the poster child for transparency and security in the cryptosphere, Binance shows no signs of stopping and will only further dominate from here when their new DEX and fiat-to-crypto exchanges open.

 

The Binance bounty program offers significant upside for information resulting in an arrest, according to an announcement made by one of the world’s largest cryptocurrency exchanges.

Last week, Binance was the target of a hacking attempt that involved the hijacking of API-trading bots that were installed into user’s accounts by hackers who gained access via prior phishing schemes. The bots were used to coordinate a massive selloff of altcoins into Viacoin, pumping its price significantly. Binance themselves weren’t hacked, though, and the company’s risk management system suspended all withdrawals at the first detection of any trading abnormalities, thus halting the hackers in their tracks. Binancereversedd all of the unauthorized trades, and users left the situation unscathed, albeit likely shaken by the close call.

How well Binance was able to block hackers and prevent widespread issues for their users has been commended by the cryptocurrency community. Adding to the positive sentiment around the cryptocurrency exchange, Binance released a statement via Medium announcing a massive campaign offering substantial bounties for information leading to arrests related to any attacks, hacks, or intrusions against Binance.

The announcement begins with a bold statement, pledging to address hacks in the crypto community:

“To ensure a safe crypto community, we can’t simply play defense. We need to actively prevent any instances of hacking before they occur, as well as follow through after-the-fact. Even though the hacking attempt against Binance on March 7th was not successful, it was clear it was a large-scale, organized effort. This needs to be addressed.”

As part of the announcement, the BNB – Binance exchange’s native token – equivalent of $250,000 will be given to the “first person to supply substantial information and evidence that leads to the legal arrest of the hackers, in any jurisdiction.” Interested security-experts can submit information via [email protected], and are also encouraged to go to their local authorities.

Furthermore, Binance announced that the $250,000 bounty is only a tiny portion of a $10,000,000 sum reserved for future bounty allocations to be awarded to those that supply information that leads to an arrest. Binance is taking lead in crypto exchange security efforts, and have even invited other cryptocurrency exchanges to join them in their pledge to stop hackers seeking to separate users from their funds.

Binance’s stand against hackers is yet another reason its customers love the fast-growing cryptocurrency exchange, which saw it’s Q4 revenue jump from $7.5 million in its first three months in operation, to $200 million. If they can continue to keep customer’s funds safe and provide transparency during trying situations, they will continue to grow and dominate the space.