Here are the latest Binance developments: Binance and the SEC struck a deal to keep U.S. customer assets in the country until the lawsuit is resolved. Binance.US carried out a round of layoffs. Prosecutors in France said they are investigating Binance for illegal canvassing of clients and money-laundering. Binance’s Cyprus unit has applied to removed from the register of crypto asset service providers there, and the company is leaving the Netherlands too after failing to meet the registration requirements there. A Binance spokesperson said it was going to focus on a smaller number of EU entities including France, Italy and Spain.
Elsewhere, Hong Kong has been urging its banks to take on crypto exchanges as clients. The Financial Times reported that lenders including HSBC and Standard Chartered were facing pressure from the Hong Kong’s banking regulator, the Hong Kong Monetary Authority, which said in a letter in April that banks’ due diligence on potential customers should not “create undue burden”, especially “for those setting up an office in Hong Kong.”
This is in line with Hong Kong’s aim to become a crypto hub (more on that here). But top banks are wary of taking on crypto firms as clients, given the recent turmoil in the industry and the specific financial risks raised by regulators.
Banks aren’t the only institutions worried about their exposure to exchanges. Crypto hedge funds and asset managers said they were taking steps to avoid the risk of another exchange collapsing or freezing withdrawals, as happened at FTX. These steps include doing transactions in several, smaller chunks, avoiding leaving money on exchanges overnight and prioritising exchanges that allow them to settle outside of the platform with a third-party custodian. As one director of trading and operations put it: “Everyone’s just so scared in the market right now.”
