No, Binance was NOT banned in the UK
The Clickbait Headline of the Day award yesterday went to Reuters for their bordering-on-irresponsible “Britain bans Binance's UK ops in latest cryptocurrency crackdown.” Let me spoil the punchline for you right up top: UK residents can still trade on Binance.com. So what’s the truth behind the FUD?
In 2020, Binance acquired a regulated business entity in the UK which they intended to use as a fiat on-ramp for their British customers. In most countries, Binance doesn’t have a direct way to deposit local currencies on to their exchange. Here in the Philippines, you can go through BloomX, buy through the P2P marketplace, or use your credit card, but Binance itself can’t connect to the formal banking infrastructure locally. It’s roughly the same in the UK. The business entity that they acquired, Binance Markets Ltd., is not yet operating, and this “ban” from the UK’s Financial Conduct Authority was simply a notice that their acquisition of that entity was not enough to clear them for local operations without the consent of the regulator.
So although the headline did massively exaggerate the impact of the notice, in general it does not bode well for Binance’s current strategy. They are too big a target for regulators to simply let them operate unnoticed within their respective jurisdictions, and their attempt to buy their way into the UK’s regulatory landscape is thus far looking unsuccessful.
Speaking of unsuccessful, Dfinity’s Internet Computer token ($ICP) is down over 90% from its ATH following its debut on Coinbase less than two months ago, surprising absolutely no one. There’s this aphorism Amara’s Law, which states that we “tend to overestimate the effect of a technology in the short run, and underestimate the effect in the long run.” Well, the first half of that saying is definitely true for $ICP.
Coindesk yesterday declared that The Bear Market has officially begun … waaaay back in April. There are a bunch of problems with this chart (for one, it’s logarithmic which visually reduces the size of the dips) but the biggest one really is that this kind of analysis can only be correct in hindsight. Like, a year’s worth of hindsight, at the very least. And even then, just barely. Within each of the supposed “bull markets” in 2017, 2019 (???), and 2021, you will find examples of drops just as large as the one we’re currently in, and you can cut and label these periods however you want depending on what you’re trying to sell. Ultimately, it feels like they just wanted to have something incendiary to share on IG, and hell, it worked. Even I’m writing about it.
Last week, John McAfee was found dead in his prison cell in Spain, and because the Internet is a terrible place, a website recently launched featuring McAfee’s portrait and the words “Contigency plan activated.” There was also a countdown timer and, surprise surprise, a link to the contract address of the $WHACKD token, an ERC20 token launched by McAfee himself in 2019. $WHACKD has seen its price rise 700% since Friday. The website itself appears to have been taken down.
I haven’t covered NFTart as much as I said I would on this newsletter, so I wanted to end today’s briefing with some news about Hic Et Nunc, a young NFTart marketplace built on top of the Tezos blockchain. Called HEN by its supporters, the marketplace differentiates itself from the Ethereum-based venues with its low-price, high-edition strategy, which makes it much easier for young investors to amass a small collection quickly while still allowing artists to make reasonable amounts from their art.
Yesterday, an exploit was found on the HEN marketplace that allowed a buyer to mint new editions of artwork that they owned, and resell them on the secondary market. The artwork itself was exactly the same, but with infinitely more editions than originally intended by the artist. This hack is a big deal: its existence completely undermines the entire point of NFTs. To complicate things further, you can’t just fix a bug like this. Once a smart contract has been added to the blockchain, it can no longer be edited, so in this instance, the exploit is permanent. Everyone on HEN will be vulnerable for as long as they continue to use the smart contract that currently governs their trading. (A new version of the smart contract is in the works, but it’s not ready yet.) In the interim, it appears that the HEN team is recommending that everyone avoid buying multi-edition NFTs, which somewhat invalidates the whole point of their platform. Eventually, everyone will have to migrate manually to the new version of their smart contract in order to protect their collection.
I’ve said previously that I wasn’t a fan of these marketplaces built on smaller chains like Tezos, but this exploit wasn’t what I had in my head when I said that. My biggest concern was that the idea behind art collecting is that it’s a way to capture value long-term, and I am not convinced that the Tezos blockchain (never mind HEN, which is just a project on that blockchain) will stand the test of time. I realize that that sounds like a very anti-innovation thing to say, but there’s a reason why $XTZ has never regained its spot in the top 10, and has never broken the ATH it set way back in 2017. DYOR, NFTartists!
See you all tomorrow, cryptofam ❤ and please share this newsletter with your friends if you found it useful!