CRYPTO MOVERS AND PRICES
CRYPTO STORY OF THE DAY
Earlier In The Week, Binance CEO Changpeng Zhao ('CZ') Met With Supporters Of The Exchange In Russia - CZ Referred To Russia As, 'Our Key Market,' Which Brings Up Questions About Implications For The Platform's US / Western Operations - We Believe This Is Most Likely Supportive Of The Recent Fragmentation Trends In Crypto
CZ spoke to a crowd of roughly 700 at a venue in Moscow. In addition to the 'key market' comment, Zhao noted Binance was always looking for partnerships, 'especially in Russia' and that Russian President Vladimir Putin would be the most important political figure in the space's near-term development. CZ further implied regulatory benefits as, 'in America, the regulators are very distributed' and that those in China are, 'not going to move anytime soon.' As a reminder, Binance recently shut off US customer access to their primary platform and relaunched a segregated exchange called Binance US.
Crypto Takeaway: The episode demonstrates how Asian trading venues, responsible for the vast majority of crypto liquidity globally, could eventually be at further odds with US / Western Governments. While tensions have cooled during the Trump Administration, in recent years the US and Europe have pushed a series of strict sanctions on the country. Binance has attempted to address this with the Binance US structure. However, if geopolitical tensions were to rise again, the US and Europe would likely take issue with a company (or company subsidiary) doing direct financial activity with Russian citizens, not to mention in the often hot-button crypto space. Fragmentation of liquidity as exchanges turn-off or attempt to segregate US activity has been a trend we have identified as accelerating over the last 6-months. Business decisions, such as those taken by Binance to aggressively pursue Russia, show that these divisions could become even more pronounced.