#Binance is an important case study in how far regulators will allow #cryptocurrency companies to encroach on tightly-controlled public markets without offering the usual investor/consumer protections. Here’s little thread on why we should be paying close attention. (1/9)

First the basics: @binance is a huge player in the crypto industry (and at this point, in finance in general). Last month, it recorded $1.2tn in spot trading on its platform, per @TheBlock__ — around 2/3 of mkt for exchanges that mostly focus on crypto-crypto pairs. (2/9)

Binance’s financial footprint is much bigger than just basic spot trading though. It offers products ranging from margin trading, futures, options, swaps, lending and savings accounts. We’re talking about some sophisticated and very highly levered stuff. (3/9)

Binance’s launch of stock tokens backed by shares w/o a prospectus has caught the attention of regulators. Germany’s BaFin says it probably breached securities rules. Binance has urged BaFin to take down its warning
https://www.ft.com/content/e7b5fd75-2d93-4a21-9178-eeb79c2f80ab @OlafStorbeck @staffordphilip (4/9)

But what about its other services? For ex, Binance has advertised “savings accounts” w/ 30-40% annual interest. See ad sent via Telegram with not a line of disclosure. Users can also borrow and are assessed interest hourly. I can access this in the UK. (5/9)

Binance has no HQ but it does have units in purview of regulators. It even has an FCA-registered financial firm based in London. (It’s owned by a Malta-HQ’d entity registered in the British Virgin Islands and is controlled by CEO @cz_binance). (6/9)

. @TheFCA btw is in contact with Binance’s UK unit but hasn’t publicly said anything else about the services it offers. Binance says it is “committed to following local regulator requirements wherever we operate.” (7/9)

Binance is big but certainly not alone and regulators’ window to decide on where they want to draw the line on what they supervise may be closing as the industry booms. Lots more on that in this @ftweekend piece w/ @staffordphilip & @eva_szalay
https://on.ft.com/3f3Zs8O  (8/9)

If you’re looking into these issues, I’d love to hear from you. I’m on [email protected] on email or @adamsamsonFT on Telegram. More ways to confidentially send the @FT news tips here: https://www.ft.com/news-tips/  (9/9)