It has been a tumultuous week for cryptocurrencies, with many big developments. Binance boss, Changpeng Zhao, minced no words this week, saying that 99% of all crypto owners will end up losing their investment “one way or another”.
His remarks come at a time when cryptocurrency exchanges have lost the public trust, especially after the collapse of FTX, Sam Bankman-Fried’s project.
Zhao said that most consumers did not know how to protect their crypto with self-custody and could expect to lose it.
He agreed, though, that should consumers ask for a self-custody exchange, he would back it. Meanwhile, Chinese police cracked down on a large cryptocurrency money laundering scheme involving $1.7bn of Tether stablecoin.
A new survey by CNBC, Make It Your Money, has found out that an increasing number of US citizens are beginning to think of cryptocurrencies as a form of gambling more so than an investment. Some 60% of respondents said that cryptocurrencies are a high-risk form of investment not unlike games of chance.
The big news this week comes with the arrest of Sam Bankman-Fried, the disgraced former chief executive of FTX. Once hailed as a crypto savior and offered glamorous coverage by Forbes, Business Insider, and the New York Times, SBF has been described as a “psychopath” by rival Binance CEO Changpeng Zhao.
SBF was arrested in The Bahamas, with the Royal Bahamas Police conducting the operation locally after it received a tip-off from the US.
Alameda Research, the company that SBF helped set up, is said to have secretly invested in The Block, a prominent specialist crypto publication, which denied ever peddling content to glorify either FTX or its former CEO.
Meanwhile, Chelsea has lost its £20m-a-year sleeve sponsorship with Amber Group, as the group had to withdraw due to poor performance in the cryptocurrency market, with heavily suppressed crypto yields.
Binance was again in the news this week on at least two instances. Once because the US Department of Justice (DoJ) may be considering official legal action against the exchange, although this is not officially confirmed. The news comes from an exclusive report done by Reuters which has knowledge of the matter.
Some DoJ insiders, though, have advised for more evidence to be collected before legal action is undertaken. The company also paused USDC withdrawals this week. Another exchange, Coinbase, urged its users this week to ditch USDT, a rival stablecoin token to USDC. Tether has described this as inappropriate.