Binance Coin punished following relationship to FTX, Genesis
- Binance price starts the week with over 3% loss.
- BNB gets a severe warning from the Bank of England that calls for a purge of the crypto industry.
- As Binance Holding is being named as a possible backer to acquire Genesis crypto brokerage service nearing collapse, it could raise questions on market manipulation.
Binance Coin (BNB) is paying a heavy price for the image of crypto traders. After Binance Holding’s deathblow to the FTT coin, which caused FTX’s implosion, the same entity is now called a possible savior of crypto broker Genesis, which is failing to come up with enough cash to avoid bankruptcy. Although there are no regulatory forces in cryptocurrencies, this dents the image of Binance and its affiliated coins as they profit from the crisis they triggered, which at least raises the impression of possible market manipulation.
BNB under calls of the BoE to be broken up
Binance Coin could be detached from its mothership, Binance Holding Ltd., to contain any image or PR nightmares as the current moves from Binance as a whole are certainly more peculiar. It almost feels like a clock is ticking before Binance headquarters will be breached by almost every law and regulatory enforcement known to man.
Bank of EnglandDeputy Governor Sir Jon Cunliffe's call was quite logical and simple: split up cryptocurrency firms in separate pieces as trading, lending, clearing and custody to avoid systematic spillovers as in the case of Genesis. The head would be cut off for the body to survive, so to speak.
BNB already got slaughtered on Monday as traders issued a vote of no confidence that translated into more than 3% losses. The risk at hand is that this slide continues as, for now, no hurdles are present to catch the sliding price performance of BNB. Should the floor at $212.50 be reached, it would mean that another 16% of market value would evaporate.
BNB/USD daily chart
The best way to brush up its image and attract investors back would be for Binance to come forward with a plan where it openly communicates its way of working so that regulatory bodies do not need to act with a breach of the headquarters and avoid seizing computers, servers, etc.
Secondly, it would need to be split into several parts to avoid systemic risks should more cryptocurrency firms and services start to wobble and default. Last but not least, Binance needs to do at least one takeover to stop or slow down the dominoes from falling. Otherwise, a worldwide spread into hedge funds could be underway.
Author
Filip Lagaart
FXStreet
Filip Lagaart is a former sales/trader with over 15 years of financial markets expertise under its belt.
