Uncovering the Enigma. What's Up With Binance

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🤔Uncovering The Enigma. What's Up With Binance?
🪙What About USDT?
🧩️Thursday Quiz
👌Selected Meme of The Day
📰Bite-Sized News

UNCOVERING THE ENIGMA

What's going on with Binance?

Representatives of the U.S. Department of Justice are considering the possibility of filing charges in connection with fraud against the cryptocurrency exchange Binance, reports Semafor.

As a response, CZ tweeted "4" (reference to his Anti-FUD rule).

On the other hand, according to these sources, federal prosecutors are worried that bringing charges against Binance could create a stir on the exchange, similar to what was already observed on FTX. They fear that this could lead to the loss of client funds and trigger panic in the cryptocurrency markets, say people familiar with the situation.

However, prosecutors are considering alternative options, such as imposing fines, deferral agreements, or avoiding prosecution. Such an outcome would be a compromise, as the exchange would be held responsible for the alleged criminal behavior, but the users would suffer minimally, Semafor reports.

In addition, the native BNB token reacted negatively to this news, it fell in price by approximately 2.2% in the last 24 hours since the news, and is now trading at the $240 mark.

Keeping in mind that Binance is not having a good time recently. First, the SEC, now the U.S. Department of Justice. Well, it sounds like the right time to diversify one's assets!

Why is Binance being pushed so hard?

An exchange, which is essentially a monopolist in the crypto market. Understandably, those with the most money attract the most attention. To put it bluntly, there is currently a battle for the market share in anticipation of that bull cycle. Exchanges make money from each user's commissions any way you look at it.

The big players are doing all they can to secure a larger market share, right before an anticipated surge of new participants join the crypto world. It's all about getting ready and aiming for the largest slice of the market they can get.

Let's hope you're preparing as well. At the very least, you're learning, studying, and practicing in all aspects of the market, and you can do this, of course, thanks to our platform and familiarizing yourself with our NL!

TL;DR: The U.S. Department of Justice is considering potential fraud charges against Binance, but prosecutors are cautious due to fears of market turmoil and user fund losses. The situation reflects a battle for market share among exchanges in anticipation of a bull cycle and increased participation in the crypto market.

WHAT ABOUT USDT?

Let's review recent events:

Tether reports net profit of $850 million for Q2 2023;
Tether blocks a 20 million USDT theft attempt due to phishing;
As a reaction to that, Binance CEO compares Tether to a "black box."

But let's take a closer look.

Tether promptly reacted to the theft of 20 million USDT from a wealthy user. The criminal used a special method to trick the victim into sending the funds.

This type of scam involves substituting the target address with a similar one, differing by just a few characters. Here's an example:

Legitimate: 0x1A9B2CD6e1f4968F2b5671AEB6F5c9B55e705730Phishing: 0x1A9B2FCD6e4f8968B3b2671ADB6F5c9B52e80573

The attempt was successful, and the victim sent 20 million USDT to the fake address (Ah, if only they had read our newsletter about double-checking addresses!).

According to PeckShield, Tether froze the funds within an hour.

Usually, the scammers first generate hundreds of thousands of wallets until they find a similar one and then send a minimal amount of crypto to the victim's account, which then shows up in the transaction history.

Since addresses aren't fully displayed, the user can mistake the scammer's wallet for their own, thus sending money to the criminals. Initially, this scheme targeted the Tron network. And yes, it's not just targeting whales with millions, you may have already been targeted by such scammers.

Binance even added statistics showing that hackers have shifted their focus to end users instead of protocols.

So, did USDT do the right thing? Mmm, yes and no, since they can block any wallet at will.

CZ expressed his desire to introduce additional algorithmic stablecoins to the market with the aim of providing investors with alternative options different from the existing ones.

In addition, CZ highlighted the risks associated with large stablecoins like USDT and BUSD. He expressed caution towards Tether due to its lack of transparency (hmm, even BUSD isn't that transparent either).

"I personally have not seen any audit reports on USDT, and most people I have spoken to also did not have that opportunity. So it's kind of a 'black box' because we just don't know... We should just work with as many stable coins as possible," said Zhao.

By the way, Tether recently published an attestation report stating its net profit was $850 million, and its total surplus reserves are $3.3 billion.

In conclusion: You never know who will turn out to be the dark horse, stay educated and may the crypto profit be with you!

TL;DR: Tether reported a $850 million profit for Q2 2023 but faced a phishing attempt where 20 million USDT was stolen. Binance CEO expressed concerns about Tether's lack of transparency, leading to discussions about introducing alternative stablecoins to the market.

THURSDAY QUIZ

Let's make it different today. Let's have a write-off competition!

Caption the image by replying to this email! Tomorrow we'll select and showcase the best 3 answers to today's challenge!