Binance Under Fire for Celebrity Spending Spree, All While "Funneling" Customer Funds?
Binance spent over $60 million hiring celebrities Cristiano Ronaldo and recording artist The Weekend for commercial ads. All this whilst funneling millions of customer funds from Binance to co-founder Changpeng Zhao's "shady" offshore firms.
WhaleWire, considered among the top Twitter accounts for Crypto Insights, tweeted this out on Thursday.
"Sounds familiar?," they ask. "Yeah, almost identical to the FTX scandal! Be careful folks."
Binance spent over $60 million hiring celebrities Christiano Ronaldo and The Weekend for commercial ads.
— WhaleWire (@WhaleWire) June 8, 2023
All whilst funnelling millions of customer funds from Binance to CZ’s shady offshore firms.
Sounds familiar? Yeah, almost identical to the FTX scandal! Be careful folks.
FTX is the cryptocurrency exchange that collapsed last last year. Our colleagues at CoinGeek had long warned readers about FTX and its shady business dealings. They even had an attorney in charge of compliance who once played a key role in an inside cheating scandal at an online poker site.
FTX also thrived based on its celebrity endorsements.
Binance teased that Ronaldo will dedicate his time and celebrity status to interacting with fans and fostering a sense of community within the NFT space.
The Crypto Times writes:
The images suggest that Binance is set to launch new project with the popular footballer, a move that is expected to generate significant interest given Cristiano Ronaldo’s immense worldwide popularity. Ronaldo currently plays for the Saudi football league club Al Nassr.
And once again our friends at CoinGeek are sounding the warning. They haven't held back when it comes to expressing concerns over Binance.
On Monday, SEC Chair Gary Gensler in a written statement that Zhao and Binance “engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law.” “The public should beware of investing any of their hard-earned assets with or on these unlawful platforms,” Gensler said.
The SEC also took action against another giant in the cryptocurrency exchange business, CoinBase.
The SEC also said Coinbase operated as an unregistered broker through Coinbase Prime, which routes orders to Coinbase's platform and other platforms, and Coinbase Wallet, which lets investors access liquidity outside Coinbase's platform.
"Coinbase's alleged failures deprive investors of critical protections, including rulebooks that prevent fraud and manipulation, proper disclosure, safeguards against conflicts of interest, and routine inspection," SEC Chair Gary Gensler tweeted.
WhaleWire tweeted:
"CoinBase CEO Brian Armstrong dumped 29,730 shares on June 5th, just a day before the SEC lawsuit was made public, and shares tanked 20%."
Jordan Atkins writes that the SEC actions against CoinBase and Binance over the past weekend could lead to devastating financial penalties for the exchanges, as well as the evaporation of their most lucrative revenue streams.
"More than that, however, is the effect that the SEC action is likely to have on the rest of the industry, many of whom are engaged in exactly the same conduct that just got Binance and Coinbase hit with SEC charges," Atkins warns.
He adds:
"The SEC would only need to prove that any exchange not registered with the SEC (read: all of them) listed any single security on its platform to make out a case under the Securities Act and the Securities Exchange Act. That’s why in its filings against Binance and Coinbase, the SEC presented a ‘non-exhaustive list’ of digital asset securities listed by each exchange."
Those include ten from Binance alone.
One of the key takeaways from the listing is that three of the tokens —ADA, SOL, and MATIC— sit among the top 10 coins by market cap.
"This means almost every exchange you can think of—if not every single one of them—is currently listing digital asset securities without registering as a securities broker-dealer, clearing house, or exchange in violation of the Securities Act and the Securities Exchange Act."
- Aaron Goldstein, Gambling911.com
