Binance Sells Its Russian Unit to Day-Old Crypto Exchange

The state of crypto is presented by Tron connecting the world to the power of Cryptocurrency. All right, we've got a quick fire round up on some of the biggest crypto regulation headlines today with coindesk global policy and regulation managing editor Nick Day. He is also the editor of coin desks. State of crypto newsletter. Nick. Good morning to you. Good morning. All right, we got a bunch of regulatory headlines this morning. One coming out of Binance who sold its Russian unit to a day old crypto exchange, talk to us about what's going on here. Why is Binance leaving Russia? Yeah, I know. So this follows on reporting from uh our friends over at Bloomberg in the journal over the last couple of months finding that Russia Russia had a pretty strong presence on the Binance platform that finance had uh you know, a significant number of users and volume coming through from finance. Uh you know, users, uh sorry from Russian users who not to put too fine. A point on it may or may not have been sanctioned because of Russia's war on Ukraine at the end last year. So this I think has been quite a bit of time coming. We've had the suspicion that um you know, we've seen reporting that the US Department of Justice was investigating finance, part of that was due to concerns about sanctions evasion by users on the platform. This seems like kind of a natural response to that to just kind of uh you know, try and you know, prove one way and uh one way or another that uh there is a firm stop that there will no longer be users from sanctioned entities or sanctioned nations uh transacting on the platform. I, I, is this something, is this, I mean, we're all grown ups here. Uh Is this something that is, I, I guess what one would call window dressing. It's a day old company. I don't know when I start a company. Usually it takes me a little bit of time to buy uh the, the Russian assets of a major crypto exchange. Uh Is, is this some sort of like, uh you know, is, is comics a comic uh set up if you will um to sort of like have a, have a, have a laugh at us by, you know, setting up this thing. It's like, doesn't have the word binance in it at all, but like, let's look at the back end. Yeah, I, I'm honestly not sure I haven't had a chance to see any kind of, you know, the, the details of paperwork or anything around that around. Uh comics. Um and you know, to be sure, I, I think if you are a skeptic or a regulator, you could say, you know, there have been instances where Binance uh said it was, you know, divesting from a certain place, but then still had a presence and, you know, we've seen that in the S AC and CFTC lawsuits against finance alleging that despite claiming to have exited the USA few years back prior to the foundation of finance us, they were still pretty active in the country. So I'm sure this is a suspicion that, you know, regulators will be, uh, you know, that regulators will have and that they'll be paying attention to. And, um, you know, I guess we'll see time will tell if finance has indeed divested itself of, if, you know, Russian entities and assets and users or if this, as you say, you know, window addresses, Michael Del Castillo needs to find if there's a, uh PDF out there, a spreadsheet at a Power Point presentation. Um So as well, I mean, we have other things going on, obviously, uh you know, you talked about the SEC before, uh we have the government almost shutting down here. Um So what does that mean for the ETF S? What, what does that mean? Now, uh with, with the applications II, I think uh that we're set to have some responses in the next couple of weeks. But uh if no one's there to turn on the lights. What, what does this all mean? So this is, this is going back to you remember the last shutdown in 2019, 2018, 2019, which was I think at the time, the longest government shutdown in us history. Uh We saw the SEC, you know, find someone and just have them tell the applicant withdraw your fund. It's not getting approved and we're not around to delay, you know, delay the decision. Um I think we're seeing the sec already preemptively start to kick back some of these decisions to their next deadlines. We saw two yesterday with hard play one shares and Global X, uh the SCC just published the standard, you know, we want more time documents like a month early uh or a couple of weeks early. So, you know, the SEC is not gonna allow these things to be approved just because no one's, you know, at the desk, they're gonna continue pushing these out, but it's definitely gonna be uh kind of a, you know, it, it's a jam, right? If you're a regulator, you're reviewing a or comments and whatever. And you know, I'm sure the industry has this idea that the SCC is going to ultimately reject these applications anyway. But still the SEC staff has to, you know, review the comments, review the application and then make all the, you know, analysis and such and they're now losing and they're going to lose a good chunk of time in which to do that. So, you know, we're gonna see ETF applications delayed. Uh, we're gonna see, um, you know, for example, uh, there are a number of active sec cases and while litigation continues, the courts remain open and I'm sure the SCC has a litigation team that will continue, that process will probably still slow down as well. So if you're a company getting sued by the SEC and you want to resolve the legal issue quickly, you're gonna be affected by this, you know, shutdown, uh, coin base, uh, had that and they, from a while back, I think last year, possibly where, uh, you know, they tried to argue that the SEC should do more rulemaking. The SEC, uh, said they're still considering it, uh, that you response is due next month. So my guess is, and this is speculation on my part, but my guess is that will probably be delayed if the government shut down. And that's just the crypto stuff. Right. There's also gonna be knock on effects to the broader country. But, yeah, as far as crypto stuff goes, it's gonna really slow down. Oh, also crypto legislation is congress going to vote on a crypto bill if they're, you know, too busy trying to figure out whether or not to fund, you know, the Department of Homeland Security. Well, does the Canadian, does the Canadian government shut down for anything other than blizzards and snow? Uh, polar bear attacks? I think that not that I've experienced. Ok. Just, just the blizzards and the polar bears. Nick. On, on that note, a bipartisan group of lawmakers wants the SEC to move forward and approve ETF applications. Talk to us about what they're asking Chair Gansler to do despite the looming shutdown. Yeah, I mean, this is, I think nothing new, right? We've seen a number of entities and people say that the IC T is, has unfairly uh rejected bit uh spot Bitcoin ETF applications. Um I think this is kind of just goes to the heart of the philosophical argument. Here is a spot Bitcoin ETF, you know, a safe product. The SCC has argued for like 10 years now that the answer is no uh citing various reasons. Um despite that they have approved a Bitcoin Futures ETF with several Bitcoin features ETF S including some under the same laws that cover Bitcoin ETF S. And so, you know, that led to the gray scale uh appeals court decision. We heard about earlier this year where the appeals court basically said, you know, your reasoning does not really make sense to us. So, you know, come back or, or go back, review this and take another look. So, uh I think the letter is just kind of a prelude to today. SCC is already testifying before the Financial Services Committee and I think just about an hour or so. So that's coming up soon. Uh Of course, we'll be watching that. But I would imagine that, you know, the many of the lawmakers who wrote that letter are on the committee, I imagine it's gonna come up, we'll hear more about it and probably other crypto issues as well. Um, and that again, I think this is just kind of, you know, it's the same argument. Right. Yes. Yes. Oh, no, I was just gonna say, speaking of laws, uh, uh, Sam Bank Fried, who, uh, has been accused of breaking a lot of them, uh, what's going on over there in, uh, in, in uh Sam Bank Friedland? Yeah. So we're getting closer to the trial starts on Tuesday. Uh, yesterday we saw the judge basically make a ruling on motions in lemonade which are the pretrial motions. Basically, uh trying to set some guardrails around types of evidence that can be introduced, the kind of questions that can be asked to some of the witnesses, the cross examinations. Um The headline of course was, you know, the defense wants to be able to ask the some of the cooperating witnesses, uh, who I agree to be as the FDX inner circle, uh about their quote recreational drug use as long as the defense asks, uh, or notifies the court and the prosecution ahead of time. Uh, defense can also cross examine around privileged company information and things like that. Uh Meanwhile, the prosecution has the ability to like they're gonna be able to introduce evidence around for example, the F TT token and whether or not it was manipulated and the uh at the direction of bank. So, you know, we're trying to get just a little bit closer to the actual trial and what that means. And we're trying to get a better sense of, you know, what we might expect to hear from some of the recreational drug use. I, that, that's something they should ask the people who did their due diligence on uh FTX before investing in it. Because clearly, you know, well, on that note, Lawrence, we are going to say goodbye to Nick this morning, Nick, thanks so much for joining us. I'm off to do my recreational liquor use. So, ok, that was Coindesk Global policy and regulation, managing editor Nick Day and don't forget to sign up for the new SBF tra newsletter that will take you inside the courtroom. You can do that on Coindesk dot com.