TLDR; In a turn of events that should come as a surprise to absolutely nobody, Binance was found to be directly manipulating volume/prices through wash sales by subsidiaries and investor funds.
The referenced section is on page 65 of the document linked below.
Specifically, the document states that Sigma Chain would sell into its own “buy” orders (or buy into its own “sell” orders), manipulating price and volume without funds changing hands.
In my opinion, this finding has far greater implications for the market as a whole than a $4.1b fine and a change in management. What’s even worse is that the filing also implies that these subsidiaries are still active until otherwise legally obligated to cease and desist.
Meaning they are absolutely currently doing this.
Zhao has to stay in the U.S. until Monday before he is allowed to go back to his residence in the United Arab Emirates. Conveniently, the UAE is a non-extradition state meaning that the UAE can decline a US request to send him back forcibly when he’s nowhere to be found on the day of his trial.
If Zhao is looking for what could be considered the most big brain exit of all time, he may use his subsidiaries to inflate the price of held assets before dumping every bag he has the second he hits UAE soil and becomes a ghost.
This could then spill over into other parts of the market and equities, most notably:
-$COIN: One bad apple spoils the bunch. Investors may rethink about their investments in any crypto firms.
-$MSTR: The court document specifically states a number of US institutional “whales” for whom Binance helped skirt regulations. They may face increased regulatory scrutiny depending on any affiliation they may have had.
-Deterioration of general investor confidence: Investors will begin to look into what other shady business their investments could be up to, unrelated to Crypto. General risk appetite decreases.
-Treasuries: The government is facing significant financial pressure, and aggressively targeting high risk assets would help drive up appetite for low risk bonds. It’s just business baby.
I’m not sure what’s going on in the markets right now, but whatever it is isn’t healthy. However, it’s clear that the FED needs Treasuries to be appealing and fast. Banks don’t like it when the music ends, but the FED may have to break the jukebox this time.