Is “Li Chu” still a “hot potato”? Is Binance in trouble this time?

Is Binance in trouble with "Li Chu" again?

On June 5th, a Bloomberg report caused a stir in the market, suggesting that Richard Teng might replace Zhao Changpeng as CEO of Binance. Later, Bloomberg reported that Binance and Zhao Changpeng were being sued by the SEC, which triggered a cryptocurrency market crash. The regulatory crisis facing Binance is obvious. Who is Richard Teng and has he really been appointed? Can Binance safely navigate this crisis? How will the cryptocurrency market develop in the future?

Behind the scenes, Binance urgently needs a “middleman”

On June 5th, according to Bloomberg, the U.S. Securities and Exchange Commission (SEC) sued Binance and its CEO, Zhao Changpeng, for violating U.S. securities trading rules. Bloomberg further disclosed that in its lawsuit against Binance, the SEC has classified SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI as securities. If this classification by the SEC is true, not only Binance, but the entire cryptocurrency market will suffer a huge blow. The market has already expressed its “attitude” through its actions, with BTC falling below the MA128 medium-term trend line on the technical chart, and a larger downward trend seems to be brewing.

This time, the SEC may not simply go through the process of suing and leave. (We will discuss this in more detail later.) Also, due to the seriousness of the issue, Binance’s succession problem has been forced onto the table. In addition, during this bear market period, many cryptocurrency institutions have collapsed, but Binance has managed to turn adversity into opportunity, and the high-level figure behind Binance seems to have emerged.

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Looking at the resume of the rumored leader of Binance, Richard Teng, prior to joining Binance, he worked at the Monetary Authority of Singapore for 13 years. He served as Chief Regulatory Officer at the Singapore Stock Exchange (SGX) for nearly 8 years, responsible for the development of rules, frameworks, and policies for listing, trading, and clearing. He then served as head of the regulator at the Abu Dhabi Global Market’s financial services regulator for 6 years. During his tenure as CEO of ADGM’s FSRA, Richard Teng launched several products, including digital banks, venture capital, fintech regulatory sandboxes, private REIT systems, manager licensing systems, and digital asset trading frameworks. Richard Teng may not have been in the cryptocurrency industry for a long time, but his rich experience in government regulation and financial risk management is exactly what Binance, currently facing regulatory difficulties, needs as a “middleman.”

Looking at Richard Teng’s promotion history, the past two years of his rapid promotion were the most turbulent years in the cryptocurrency market, during which many well-known cryptocurrency institutions and exchanges collapsed. This was also the most complicated time for Binance to face regulatory challenges, especially the twists and turns between Binance and FTX, which may have been directed by some high-level figures. Let’s take a look at Richard Teng’s job history at Binance. In August 2021, Richard Teng joined Binance as the CEO of the Singapore region; from December 2021 to October 2022, Richard Teng served as the new head of the Middle East and North Africa region; from November 2022 to April 2023, Richard Teng served as the head of the Asia, Europe, Middle East, and non-US regions, and was appointed to lead all regional markets outside the United States two months later. From the timeline, Richard Teng was promoted four times in less than two years, which could be called the “crown prince”.

“Crown prince” or “hot potato”, Richard Teng may not be modest

From the perspective of news, Richard Teng’s “crown prince qualification” may have already formed a consensus internally. According to Coindesk, a former Binance employee who requested anonymity revealed: “Senior leaders and regulatory agencies have all agreed after closed-door discussions that Richard Teng is the only leader who can take over from CZ and continue to build the company according to CZ’s vision, while helping to bridge the existing gap between the industry and regulatory agencies.” For this executive, Binance co-founder He Yi also gave recognition in a recent interview, “I think he is an experienced professional manager. Since he joined Binance, his scope has been continuously expanding, and we all like and recognize Richard.”

Richard Teng seems to be preparing to take over Binance’s work. Recently, Richard Teng has also represented Binance in various activities at a high frequency, and has been actively operating his own Twitter account since May this year. Of the total of 29 tweets, as many as 28 were published since May, indicating that Richard Teng has significantly increased his external frequency on behalf of Binance since his latest promotion.

But in essence, Richard Teng is at most a “working emperor”. This is a suitable “middleman” for Binance in the transition to compliance. Richard Teng will not be responsible for Binance’s past problems; in the future, even if Zhao Changpeng resigns as CEO due to litigation issues, the new “CEO” will also have He Yi “listen to the government behind the curtain.” Currently, Binance is more like a “hot potato”, so it will not be a “succession in order of priority, crown prince succession” in peacetime. Therefore, Teng’s response to external speculation is not modest. Teng emphasized in response to the media on June 6 that Binance acknowledges that there have been compliance issues in the past, but there has been a significant turnaround in the past 18 to 24 months. We hope to solve all these policy issues responsibly and continue to prove that we are a brand new organization. In addition, Teng said in a recent interview with CoinDesk that it is too early to speculate that he has been trained as the new CEO to replace CZ, and the new position is not a promotion, but an expansion of the responsibility to help CZ review certain things.

Under regulation, Binance “crosses the robbery”, and the encrypted market is like walking on thin ice

In February of this year, Blockingxos was ordered to stop issuing new BUSDs, and Binance’s stable currency business could not continue. In March, the US Commodity Futures Trading Commission (CFTC) sued Binance and Zhao Changpeng for violating regulatory rules and sought permanent trading and registration bans. In addition, regulatory agencies in Australia, Canada, Dubai and other places are strengthening regulatory policies on Binance, and Binance has to stop providing services to relevant areas. Since March of this year, Binance’s market share has dropped by about 10.8%, and regulation is undoubtedly the main influencing factor. This series of actions has also made the encrypted market silent and like walking on thin ice. After Binance “crosses the robbery”, this is not the end, but the beginning.

After FTX’s explosion last year, Silicon Valley Bank and Silvergate have also gone bankrupt this year. The regulation of the encrypted market is also tightening continuously, and it may be the time to start closing the net. At the beginning of this year, the US Federal Reserve and other regulatory agencies have issued warnings to the banking industry about “cryptocurrency risks”. According to the “Blocking” report, in March, the Federal Reserve Board of the United States explicitly rejected Custodia Bank’s membership application. On March 13, US President Biden stated that he was pleased that the Treasury Department quickly resolved the issue of Silicon Valley Bank, and planned to continue to strengthen the supervision of large banks by pursuing the responsibility of relevant parties who created “this chaos”.

According to the “Blocking” report, Frank ChaBlockingrro, the news director of The Block, once tweeted that the crypto-friendly bank Signature Bank was closed by the New York State regulatory agency on Sunday. This will make the banking situation of crypto companies extremely difficult and absolutely cruel. The capital market of cryptocurrencies has basically returned to before 2014. Any newly established company has no chance to obtain a banking cooperation relationship. In many ways, the cryptocurrency industry has officially lacked banking services.

Summary

Since this year, the United States has been like doing a targeted surgery against the cryptocurrency market, first doing “surgery”, mainly cutting the traditional financial and cryptocurrency industries in the United States; then doing “internal medicine surgery” against the cryptocurrency market, targeting the major players in the cryptocurrency market one by one. Overall, it seems that the SEC is trying to eliminate our industry, as Binance.US said on Twitter.

Regarding the future, perhaps what Binance.US claimed might be a good solution: “We hope that the SEC can constructively establish a clear and practical regulatory framework that enables such enterprises to grow and create employment opportunities; we call on Congress to intervene and pass bipartisan legislation to create a feasible regulatory system for digital assets and to control excessive bureaucratic behavior.”

Author: BlockingBitpushNews Asher Zhang

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