Our Managed Fund divested its BNB position last year as the regulatory heat from the US started to grow. As our best performing asset delivering 2800% return, it was difficult to let go. That Binance was in the sights of the SEC seemed rather obvious and was difficult to ignore. Sure enough, the lawsuit finally dropped.

The specifics of the action are that Binance knowingly facilitated US entities to trade on their platform by instructing them on ways to connect to Binance systems despite the US block. The clients were very highly sophisticated US trading firms who knew exactly what they were doing and were sophisticated enough to do it. 

I see a significant difference in this case and the one we will cover shortly on Coinbase. For Binance, we are talking about massive trading firms, who knew what they were doing and wanted to do it. There is no suggestion anywhere that they lost money as a result. I imagine they made a lot of money trading against retail clients globally. There is no suggestion of either fraud or foul play by Binance; their SAFU fund played a key role in steering through the collapses of late 2022. 

Binance is rich. CZ is rich. They will recruit an army of lawyers and inflict maximum time consumptive pain on the US authorities such that a deal will be done. Fines will be paid and promises will be made of no repeat. Binance isn’t going anywhere; they got big globally and if the US wants to be a significant player in this space they will have to play ball with Binance.

For me, Binance are maligned because they are seen as a ‘Chinese firm’ (CZ is Canadian). Fine, their shareholding is opaque and some of the shareholders are Chinese but most of the action, and the attacks, and the media that targets Binance is nothing short of racism. 

One guy, the American guy, SBF stole $9 billion of other people’s money. The other guy, the Chinese one who is in fact Canadian, didn’t. He started an insurance fund that backs up the whole industry, he runs the biggest exchange in the World, a very good one. 

He responded like this. Which is his coded signal that I’ll let you look up for yourselves. 

CZ is a winner. In the short term his American ambitions will be thwarted because his crime is he is the wrong colour and looks a bit Chinese. Things like this are not allowed to be said but when it’s true, we should be calling it out.