The surprising fall of the Binance crypto exchange and its founder CZ is raising hopes for the approval of spot bitcoin ETFs in the U.S. after CZ pleaded guilty to sanctions violations and resigned with a settlement of $4.3 billion. Some believe his downfall paves the way for the approval of spot bitcoin ETFs in the U.S., as the SEC faces deadlines to decide on several proposed ETF rule changes.
Former Binance Dominance
With CZ’s resignation and Binance’s agreement to strengthen compliance, regulators may now be comfortable approving select ETF applications. There’s hope that removing Binance’s dominance will facilitate the approval of bitcoin investment vehicles like ETFs.
Despite market concerns and initial price drops, both Bitcoin and Binance Coin have rebounded after CZ’s demise. The move is seen as a positive development, clearing the regulatory path for direct bitcoin investment vehicles like ETFs.
SEC and Bitcoin ETFs
The Securities and Exchange Commission (SEC) faces deadlines in the coming months to decide on proposed rule changes for bitcoin ETFs, with estimates that the market could expand to over $100 billion in assets under management with regulatory approval.
Giant investment firms like BlackRock and Fidelity are betting on the approval of ETFs as a breakthrough for the crypto industry, while Binance’s concessions on financial crimes aim to help the industry’s mainstream credibility recover.
Binance’s Reliability
Despite doubts about Binance’s trustworthiness, the company has enough reserves to pay its fines. CZ’s departure could open the door for traditional finance to embrace crypto, and Binance’s fall significantly enhances the odds of that happening.
Hot Take: Implications of Binance’s Downfall
The tense situation prevailing beforehand has only worsened with recent events, as it has become significantly more difficult to gain the necessary approval to go through with current plans. Whether this corresponds with the already ongoing struggle, only the future will tell.
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