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Op-ed: Binance’s reputation at risk as CFTC allegations raise concerns

Op-ed: Binance’s reputation at risk as CFTC allegations raise concerns

The U.S. Commodity Futures Trading Commission (CFTC) has sued Binance, the world’s largest cryptocurrency exchange, and its CEO, Changpeng Zhao (CZ), for allegedly violating federal law by allowing Americans to trade crypto derivatives on its platform.

The CFTC has been investigating Binance since 2021 on allegations that the exchange allowed U.S. residents to use its platform to buy and sell crypto derivatives, which require registration with the CFTC under current laws. The lawsuit alleges that Binance solicited U.S. users for millions in revenue, violating federal law. CFTC has also sued Binance for operating without being registered with the agency and without proper know-your-customer procedures.

The lawsuit also claims that Binance traded against its customers, taking advantage of inside information and manipulating markets to increase profits. Additionally, Binance’s former chief compliance officer, Samuel Lim, was charged with aiding and abetting the company’s violations. This is a severe breach of trust if this is true. The accusation of Binance trading against its users is particularly troubling. If true, this would be a betrayal of trust and a violation of the principles of fair trading.

Impact on Binance

As a cryptocurrency exchange, Binance should be a neutral platform that facilitates trading between buyers and sellers, not one that takes advantage of its users. If found guilty by the CFTC, it could face significant penalties and consequences. The CFTC can impose fines, seek injunctions, and even ban individuals or companies from participating in commodity markets. Binance could also face civil lawsuits from affected users or investors.

Additionally, Binance’s reputation could be severely impacted if found guilty of the CFTC’s charges. Trust is essential in the cryptocurrency market, and if Binance is seen as a bad actor that trades against its users, it could result in a loss of confidence from its clients and investors. It could affect Binance’s ability to operate in the U.S. and other regulated markets, limiting its growth potential.

Impact on industry

From a broader perspective, it could harm the entire cryptocurrency industry. Binance is currently the world’s largest cryptocurrency exchange and plays a significant role in the market. A loss of confidence in Binance could lead to a decrease in overall market trust and investment. It could increase regulatory scrutiny and stricter regulations for other cryptocurrency exchanges.

Rostin Behnam, CFTC Chairman, said in a statement:

“For years, Binance knew they were violating CFTC rules, working actively to both keep the money flowing and avoid compliance. This should be a warning to anyone in the digital asset world that the CFTC will not tolerate willful avoidance of U.S. law,”

If I am not wrong, this is the first time CFTC has gone against a crypto exchange. The allegations by the CFTC are not to be taken lightly, and Binance should address them with transparency and accountability. It is vital to remember that these are allegations, and Binance has not been found guilty of wrongdoing.

Therefore, we should reserve judgment until all the facts have been presented in court. The consequences of being found guilty by the CFTC could be severe for Binance and its operations. It remains to be seen what the outcome of the lawsuit will be, and Binance has denied any wrongdoing and vowed to fight the charges.

It is also important to note that Binance has been scrutinized by various regulators worldwide. This is not the first time the exchange has faced accusations of regulatory violations. This raises concerns about the exchange’s compliance procedures and willingness to follow regulatory requirements.

Binance has responded to the lawsuit, stating that its priority is to continue protecting its users while working with regulators to ensure compliance. Binance has denied the allegations, stating that they have always complied with U.S. regulations and that the CFTC’s claims are without merit.

CZ had also publicly clarified on his blog:

“We are collaborative with regulators and government agencies worldwide. While we are not perfect, we hold ourselves to a high standard, often higher than what existing regulations require. And above all, we believe in doing the right thing by our users at all times. In this journey towards freedom of money, we do not expect everything to be easy. We do not shy away from challenges.”

It remains to be seen how the case will play out. Still, the CFTC is taking a strong stance on regulating cryptocurrency trading — companies like Binance must ensure they comply with all relevant laws and regulations to avoid similar legal action in the future.

The outcome of the lawsuit remains to be seen, but companies like Binance must comply with all relevant laws and regulations to avoid similar legal action in the future. Ultimately, the importance of regulatory compliance and transparency cannot be overstated. Binance’s ability to clear its name and move forward in a transparent and accountable manner will be crucial for the entire industry’s health and growth.

 

Source: https://cryptoslate.com/binance-reputation-at-risk-as-cftc-allegations-raise-concerns/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Op-ed: What can we see in web4 that we’re missing in web3?

Op-ed: What can we see in web4 that we’re missing in web3?

The more I speak and advise on crypto and blockchain matters, the more I think there is a gap between what decentralization is and reality. I do not doubt the feasibility of decentralization; I am just not sure if the current version of Web3 is decentralized enough. Maybe we are what everyone is saying, “we are merely in Web 2.5.”

Let’s begin.

WWW

WWW stands for World Wide Web. It is a system of interconnected documents and other resources linked by hyperlinks and URLs. The World Wide Web is a way to access information over the internet; it is not the internet itself.

It was created by Sir Tim Berners-Lee in 1989 while working at CERN (the European Organization for Nuclear Research) in Switzerland. The World Wide Web is built on the internet, allowing users to access and share information through various platforms, such as web browsers, mobile apps, and other software.

It is based on HTTP (Hypertext Transfer Protocol) and HTML (Hypertext Markup Language), which allows for creating documents containing text, images, videos, and other multimedia content. The World Wide Web is constantly evolving, and new technologies are being developed to improve user experience, security, and accessibility.

Web1

Web 1.0 refers to the first generation of the World Wide Web, primarily focused on providing static, read-only content to users. This phase of the web began in the 1990s and lasted until around the early 2000s.

Web 1.0 websites were typically simple, text-based pages with limited graphics and few interactive features. Individuals or organizations created and maintained them and were primarily used for sharing information, such as personal profiles, news articles, and research papers. Navigation was often limited to simple text links, and no search engines could help users find the information they needed.

Web 1.0 was characterized by its lack of interactivity and user-generated content. Users were mainly passive information consumers and could not interact with the web pages, leave comments, submit forms, upload files, and so on.

Web 1.0 was also limited in terms of accessibility, as many users were still using slow internet connections and older browsers that could not handle more advanced web technologies. As a result, web pages were often simple and limited in design.

In summary, Web 1.0 was the first phase of the World Wide Web. It was a time when the internet was still young, and the web was mainly used to share information, but with limited interactivity and user-generated content.

Web2

Web 2.0 refers to the second generation of the World Wide Web, which emerged in the early 2000s. It is characterized by the emergence of user-generated content, social media, and the ability for users to interact and collaborate online.

Web 2.0 technologies include social networking sites, blogs, wikis, and video-sharing sites, which allow users to create and share their content, rather than simply consuming content created by others. These technologies also allow for greater collaboration and communication among users, increased accessibility, and the ability to share and access information from various devices.

Web 2.0 sites are more dynamic and interactive than their Web 1.0 counterparts. They include features such as comments, ratings, and the ability to share and promote content across multiple platforms. They also use advanced technologies such as AJAX, which allows for more responsive and interactive interfaces, and rich media, such as videos and images.

Web 2.0 also brought the concept of “crowdsourcing,” which was the idea of leveraging the collective knowledge of the internet to create and improve content.

In summary, Web 2.0 is the second generation of the World Wide Web, it emerged in the early 2000s, and it’s characterized by the emergence of user-generated content, social media and the ability for users to interact and collaborate online. Web 2.0 sites are more dynamic, interactive, and collaborative than their Web 1.0 counterparts.

Web3

Web3, also known as Web 3.0, is the next evolution of the World Wide Web, characterized by the use of decentralized technologies, such as blockchain and smart contracts, to enable new forms of online interaction and commerce.

Unlike the current web, which is primarily controlled by centralized entities such as corporations and governments, the vision for web3 is to create a decentralized, open, and transparent network where users have more control over their data and online interactions. This includes using decentralized apps (dApps) and interacting with decentralized finance (DeFi) platforms, among other things.

Web4

Web4 is not a widely used term nor a consensus definition, so it may refer to different things depending on the context. However, some people use the term “Web4” to refer to the next generation of the World Wide Web, which would be even more decentralized and more focused on artificial intelligence, the semantic web, and the internet of things, among other things.

It would be characterized by more dynamic, autonomous, and interconnected systems that can learn from data, communicate with each other and adapt to changing environments. This would allow for more dynamic and adaptable systems that can learn from data and improve over time.

Some of the advantages of a more decentralized web include the following:

  1. Greater security and privacy, as users have more control over their data and online interactions
  2. More open and transparent systems, as there is no central point of control or failure
  3. Greater resilience and robustness, as the network can continue to function even if parts of it fail
  4. More innovation and competition, as there are fewer barriers to entry for new players

Web4 is seen as the next evolution of the World Wide Web, building upon the decentralized technologies of Web3. In Web4, the user experience is streamlined and frictionless, with the underlying technical details abstracted away. This means that users won’t need to worry about the specific blockchain being used, the intricacies of ZK-Rollups, or setting the correct gas limit for transactions. The gas wars and transaction fees of the current web3 will be a thing of the past.

Moreover, Web4 has the potential to create a circular crypto-economy that transcends physical and digital boundaries, making the need for fiat on and off ramps obsolete. This would be a significant disruption in the current financial system.

There are other interpretations of what Web4 could be, such as the “symbiotic web,” which refers to a symbiotic relationship between humans and machines, possibly even utilizing direct brain-machine interfaces.

Overall, the transition from Web1 to Web2, and now from Web3 to Web4, is similar in that it is a gradual process that opens new doors and invites more people to participate. While Web3 is still in its early stages and considered experimental, Web4 is expected to be more accessible and user-friendly, making it more widely adopted by the general public.

Where are the opportunities?

Web 4.0 offers a wealth of possibilities for companies and individuals. The symbiotic web will create more personalized experiences, allowing businesses to understand their customers better and provide tailored content.

AI-powered automation will improve efficiency, speed up time to market, and lower costs, giving businesses a competitive edge and better customer service.

The combination of hardware, software, and data will enable the development of new products and services, such as connected devices interacting with users and gathering data for personalization.

Web 4.0 also creates new revenue streams using data collected, like targeted advertising or subscription services.

Additionally, VR and AR applications will allow for new ways for businesses to engage with customers, for example, creating an AR application that allows customers to interact with products in a 3D space.

I will elaborate on this further below.

In summary, what do I see in Web4?

1) Industry 4.0 full automation

Industry 4.0 full automation uses advanced technologies such as IoT, AI, robotics, and digital twins to automate industrial processes fully. This results in increased efficiency, reduced costs, and improved product quality, leading to a fully autonomous and connected smart factory. The concept of Industry 4.0 is focused on creating a highly automated and digitized production environment. To be fully autonomous, web4 adds a layer of trust.

2) Decentralised sustainable metaverse + AR + VR

Combining a decentralized sustainable metaverse, AR, VR, and Web4 technologies creates a new dimension of the internet where users can experience a fully immersive and interactive virtual world. The decentralized aspect ensures that users have control over their data, and the virtual world operates sustainably.

AR and VR technologies enhance the experience by allowing users to interact with the virtual world more realistically and engagingly. Web4, also known as the Semantic Web, provides a decentralized and intelligent web infrastructure, enabling the metaverse to function seamlessly and intelligently. Together, these technologies create a new and exciting virtual experience accessible to many users.

3) AI making steps into the decentralized realm

AI is making steps into the decentralized realm with Web4 by enabling the creation of decentralized AI systems that operate on a peer-to-peer network. This combination of AI and Web4 technology allows for the creation of decentralized and autonomous systems that can perform complex tasks without a central authority.

4) Real decentralized apps and economies

This allows for creation of new business models and economic opportunities where transactions are secure, transparent, and tamper-proof. With Web4, dApps can be built and deployed on a decentralized network, providing users with greater control over their data and the ability to interact with the dApp in a secure and decentralized manner. This integration of Web4 in the decentralized app and economy development has the potential to create new and exciting opportunities for businesses and consumers alike.

5) Real power back to the users

This was briefly mentioned above. Web4 technology aims to give real power back to users by creating a decentralized and secure network where users have control over their data. With Web4, applications can be built and deployed on a decentralized network, allowing users to interact with the application in a secure and decentralized manner. This eliminates the need for a central authority, giving users greater control and autonomy over their data and interactions.

Additionally, the decentralized aspect of Web4 enhances the security and privacy of user data, reducing the risk of data breaches and providing users with greater control over their personal information. By giving power back to users, Web4 has the potential to revolutionize the way we interact with technology and the internet.

Web5 and Jack

In 2022, Jack Dorsey, the former CEO of Twitter, emerged as a leading figure in the development of Web5. He shared his vision for the next generation of the internet at the Consensus crypto and blockchain conference. Dorsey’s team at TBD, the Bitcoin-focused division of his fintech company Block (formerly known as Square), supports him in this endeavor.

According to Dorsey, Web5 is a solution to his issues with Web3, particularly his belief that it will never fully achieve decentralization.

“You don’t own ‘Web3.’ The [venture capitalists] and their [limited partners] do,” Dorsey said in a tweet, referring to the billions being poured into Web3. “It will never escape their incentives. It’s ultimately a centralized entity with a different label.”

“Know what you’re getting into,” he warned.

I do agree with Jack on this. The current practitioners often say that we are still in web2.5 is the same. It is not because we are not ready. We did not start this whole web3 era in the right foot and with the right decentralization model.

Ending note

Yes, it’s important to note that true decentralization is a core principle of a decentralized economy. This means that no central authority or intermediary is controlling or managing the network or its transactions. I have repeated this many times in my article. Instead, power and control is distributed among the network’s participants, and decisions are made through consensus mechanisms such as voting or proof of work.

Decentralization ensures that the network is resistant to censorship, fraud, and other malicious activities and that its users have complete control over their assets. While this is still in an ideation stage and frankly somewhat idealistic, perhaps Web4 is the chance for us to redefine decentralization, reform and improve decentralization, and revalue the true meaning behind decentralization. I will speak at the TMRW Conference in Dubai from 8-10 February 2023 on Web4. I hope to take this chance to speak to all the tech experts at the venue too.

 

Source: https://cryptoslate.com/op-ed-what-can-we-see-in-web4-that-were-missing-in-web3/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Op-Ed: South Korea’s new president aims to take crypto to the next level

Op-Ed: South Korea’s new president aims to take crypto to the next level
Plans including raising the crypto tax threshold and legalizing ICOs are welcome, but will they give South Korea the shakeup it needs?
President Yoon Suk-Yeol plans to raise the current crypto tax threshold from around $2,000 to approximately $40,000. The current president Moon Jae-in lost the opportunity to take the country forward with a more positive crypto policy, in a country where last year Koreans invested over $43 billion in crypto assets in 2021.In April 2021 younger investors filed a number of petitions for example complaining how crypto assets were being taxed at a less favorable rate than stocks. Now this victory means that their voice is being heard, which I believe is great news, not just for the crypto industry, but for this new generation of investors. But at the same time, as someone involved in the Korean market since 2017 while I welcome the reports coming out of Yoon’s Presidential Transition Committee, I also know what matters is what happens after the new president takes office on May 10.

There is a risk the new government decides to allow investing in ICOs, IEOs, and STOs only to those above a certain income, to accredited investors. Certainly, the news of a new Basic Digital Asset Law, to enable the recovery of funds lost from illegal trades and scams is very welcome. But at the same time, a balance has to be struck, so the younger generation of investors in their 20s and 30s, who consist of around 36% of the market, feel they have a stake in the new system.

I also note that play-to-earn games are still illegal with no plans to change that. So, it’s somewhat ironic that the recent $620 million hack of Axie Infinity was reportedly carried out under the auspices of the North Korean government. While South Korea and the US are therefore looking to work more closely on cybercrime, there is a risk that the US will also seek to put pressure on the South Koreans to take a more highly regulated approach to crypto more in line with emerging US policy.

Will the prospect of a growing NFT market bear fruit?

What I do expect is for the market in NFTs in South Korea to grow in the future. And I think this presents a window of opportunity for the new government to take a positive approach. While the Financial Services Commission (FSC) is reportedly working to introduce NFT rules, this is yet to happen. Another potential source of frustration within the investor community is the complexity of using exchanges with different travel rule systems.

Among the big four exchanges Upbit, Bithumb, Coinone, and Korbit (with over 95% of the crypto market share), there are two travel rule systems. Upbit with the lion’s share of the exchange market has adopted its home-grown Verify VASP program, while the remainder follows another system. So, it’s perhaps good to know that Yoon’s Presidential Transition Committee is also “looking to grant more cash-to-crypto licenses to crypto trading platforms in efforts to dilute the local crypto exchanges oligopoly”.

Another overlapping issue is the dominance of the Upbit exchange in the South Korean crypto market. What’s interesting to me is seeing the concerted move by local banks to enter the crypto market. Part of the banks’ motivation to approach the incoming government is down to the fact that Upbit has over 80% of the market share.

This is underlined by the fact that Dunamu, operator of Upbit, posted a net income of 2.2 trillion won (around $1.8 billion) last year, with the figure growing 46-fold on-year. The news reportedly “shocked onlookers, as it drew near Woori Financial Group, a major banking group here. Woori posted a net income of nearly 2.6 trillion won in the same period”, according to the Korea Herald.

Banks fight for a slice of the crypto pie

Allowing banks to take apart on a more equal footing with exchanges certainly marks a step forward with potential implications for competition in regional crypto markets as well as internationally. Certainly, in Singapore, we have seen a tightening of regulations since the ICO boom years of 2017/18 which attracted so many crypto startups.

This stricter regulation has prompted startups to leave for the likes of more crypto-friendly Dubai, including global exchange Binance which recently withdrew an application to register in Singapore, instead setting up an office in the UAE.

The economic risks of not moving fast enough are also shown in the UK, where despite government plans for crypto growth there’s been significant criticism of its regulator, the FCA, for being too slow in processing crypto license applications to allow crypto startups to operate.

So, while I believe South Korea is likely to try to be more open, it’s going to be a tricky path to walk to keep all the different segments onboard, from crypto industry stakeholders to expectant younger investors. The ‘proof is in the pudding’ as they say, because while the incoming government might talk about plans to legalize ICOs it may in the fine print only be available to people who have say $1 million in assets.

However, on a more optimistic note, I do agree with crypto commentators such as Anthony Pompliano that South Korea’s crypto plans are potentially a significant step on the world stage. Yoon Suk-yeol is the first head of state from a major economy that says it plans to take crypto really seriously, including protecting the public; however, it’s also worth noting that outlined plans to set up a dedicated government agency for crypto and NFTs did not make it into the final copy of his campaign pledges.

Speaking recently in Korea on the same platform with a member of the People’s Power Party, I said that crypto and blockchain was the future. We now have to wait and see how well that promise and potential is delivered.

 

Original Source: https://cryptoslate.com/op-ed-south-koreas-new-president-aims-to-take-crypto-to-the-next-level/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j