The world’s largest crypto exchange Binance has reportedly eliminated Barry Silbert’s Digital Currency Group’s (DCG) ability to make time-weighted average price (TWAP) trades. The potential reasons behind the move involve legal risks amid Genesis bankruptcy and investigations by the U.S. Department of Justice (DOJ).
Crypto influencer Andrew in a tweet on January 24 revealed that lots of unconfirmed rumors signal that Binance has “eliminated” DCG’s time-weighted average price algorithm (TWAP) trading strategy and potential transactions.
“Lots of ‘unconfirmed’ rumors that Binance has eliminated DCG’s ability to TWAP trade and potentially trade altogether.”
He said the reasons may include legal risks, a US Department of Justice investigation, and an API shutdown after DCG’s lending business Genesis Capital filed for Chapter 11 bankruptcy. In a subsequent tweet, Andrew claimed that Binance is likely stopping transactions, saying “Now remove the ‘unconfirmed’ from the above.”
The U.S. Department of Justice and the Securities & Exchange Commission have expanded the scope of the investigation of DCG. Moreover, the agencies asked DCG and Genesis to provide details on internal transfers and loans between the firms.
After two weeks, Genesis Trading’s lending arm Genesis Capital filed for Chapter 11 bankruptcy. The largest creditors include Gemini with 765 million, Bybit’s Mirana with 151 million, Babel Finance with 150 million, Coincident Capital with 110 million, and 50 other largest unsecured claims.
Crypto exchange Binance has been under continuous attack by critics over a lack of transparency. Questions were also raised after audit firm Mazars, which provided proof-of-reserves for Binance, suspended services for crypto companies and removed the proof-of-reserves report from its website.
Despite FUD, Binance CEO CZ said the firm has increased global compliance, transparency, and user protection initiatives. Meanwhile, a U.S. federal investigation into Binance has been ongoing on alleged violations including unlicensed money transmission, money laundering conspiracy, and criminal sanctions violations.
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