A recently published Reuters report cites three unnamed sources saying leading cryptocurrency exchange Binance comingled “billions” worth of customer funds in 2020 and 2021. Binance has denied comingling user funds and said the report was false.

The Securities and Futures Commission (SFC) of Hong Kong revealed in an announcement on Tuesday that it would begin accepting license applications for cryptocurrency trading platforms starting from June 1.

Popular hardware wallet firm Ledger is delaying the launch of its Ledger Recover offering after facing significant backlash from the cryptocurrency community over the past week.

Top stories in the Crypto Roundup today:

• Binance Denies Commingling User Funds
• Hong Kong Opens the Door for Retail Crypto Trading
• Ledger Delays Key Recovery Tool Launch After Community Backlash
• Bitcoin Volatility Dropped Significantly in 2023

Binance Denies Commingling User Funds

A recently published Reuters report cites three unnamed sources saying leading cryptocurrency exchange Binance comingled “billions” worth of customer funds in 2020 and 2021. Binance has denied comingling user funds and said the report was false.

Reuters’ insider sources reportedly said that Binance, using the now obsolete Silvergate Bank, intermixed vast sums on an almost daily basis. The news agency, it’s worth noting, has previously brought to light allegations of money laundering and unconventional money transfers involving the exchange, which Binance strongly denied.

In reaction to the allegations, Patrick Hillmann, Binance’s Chief Communications Officer, voiced his objection via Twitter, stating the details in the recent report are erroneous. Hillmann said:

“We’ve been very public about where the company had regulatory shortcomings in the past, there’s no reason for a respected news outlet like Reuters to continue making stuff up.”

In its article, Reuters acknowledged it was unable to independently confirm the values or frequency of the disputed transactions. They found no evidence to suggest Binance lost the purportedly intermingled assets.

At the center of the controversy is Binance's stablecoin, Binance USD (BUSD), customers’ accounts were credited with BUSD instead of U.S. dollars when they made deposits.

Hong Kong Opens the Door for Retail Crypto Trading

The Securities and Futures Commission (SFC) of Hong Kong revealed in an announcement on Tuesday that it would begin accepting license applications for cryptocurrency trading platforms starting from June 1.

In a report on policy consultation published on the same day, the regulator stated that licensed digital asset providers would be permitted to cater to retail investors, as long as operators evaluate their understanding of the inherent risks.

As part of the proposed rules stablecoins “should not be admitted for retail trading" until intended regulations for the asset class are implemented. The new regulations also expressly prohibit crypto "gifts", which are incentives for retail customers to invest, likely referring to airdrops.

Under the new framework, crypto exchanges must at all times hold no less than 5,000,000 Hong Kong dollars ($640,000) in capital.

They are also required to submit a monthly report to the SFC containing details of their available and required liquid capital, a summary of bank loans, advances, and credit facilities, along with a profit and loss analysis, while approved tokens on regulated exchanges need a 12-month track record.

All tokens to be listed on exchanges must undergo a rigorous due diligence procedure, even if they have been previously listed on another platform, and independent assessors will perform audits on smart contracts.

On implementing the Financial Action Task Force's (FATF) travel rule for sharing crypto transaction information between financial institutions, the SFC agreed to accept submissions as soon as feasible after the transfer of the virtual asset until January 1, 2024, if the required information isn’t immediately provided to the beneficiary institution.

Ledger Delays Key Recovery Tool Launch After Community Backlash

Popular hardware wallet firm Ledger is delaying the launch of its Ledger Recover offering after facing significant backlash from the cryptocurrency community over the past week.

During a virtual gathering on Twitter Spaces that drew in over 13,000 participants Pascal Gauthier, Ledger’s CEO, described the public response as a "humbling experience" and admitted to the company's missteps in communication.

Gauthier shared that Ledger plans to accelerate the open sourcing of more of its codebase in response to the community's concerns, beginning with core components of its operating system and Ledger Recover. Gauthier detailed the service won’t be launched until this is complete.

Charles Guillemet, Ledger's chief technology officer, said that the open sourcing would allow developers to create their own backup providers for the seed phrase shards, instead of relying on Ledger's offering.

Guillemet noted that a white paper on the Recover Protocol would also be shared in the coming days, along with technical blog posts detailing the principles and operation of the Recover process.

The recent controversy erupted after Ledger announced plans on May 16 to launch Ledger Recover, a key recovery tool. This tool, available through a firmware update, was intended to assist users who had lost their private seed phrase by offering an optional recovery feature.

Some in the crypto community, however, expressed concerns that the update may inadvertently create a "backdoor" that could lead to the extraction of a user's private keys from their devices.

Bitcoin Volatility Dropped Significantly in 2023

CCData’s latest insights highlight that the volatility of Bitcoin ($BTC) has decreased significantly in 2023, falling to 48.2% from 62.8% in 2022, and significantly down from 79% in 2021.

Bitcoin's trading range in 2023 further underscores its increasing stability, reflecting an average daily gain of 1.68% and a loss of 1.93%.

Discover extensive market insights on our Trade Data page, covering 300+ exchanges & 300,000 currency pairs.

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