Benzinga‘s recent Fintech Deal Day & Awards and Future of Digital Assets conferences created plenty of buzz in the Web3 community. Still, among constructive discussions about the next phase of this industry, “Shark Tank” star Kevin O'Leary's warning about the world's largest cryptocurrency exchange stands out.
"Just 14 months ago, Binance and FTX were 94% of the market for the new digital economy. Today, just months later, that era is over,” the O'Leary Ventures chairman said in a discussion with Anthony Pompliano.
"FTX is history, and Binance will be history soon," O'Leary warned Nov. 13.
‘I’ve Seen This Story Before’: O’Leary was not optimistic about the largest crypto exchange getting to the necessary level of compliance.
"FTX was trying to do that, that’s why I was involved with those guys trying to design that compliance element that would plug into an institution. They never got there [and] Binance certainly doesn’t do it," he said while offering his view on Binance founder Changpeng Zhao.
"We’ve got to be thankful for him because he was a great entrepreneur who started something great, but he’s got multiple charges from money laundering to intermingling accounts. Personally, I’ve seen this story before. It ends really badly and worse for him. No institution is going to give him a dime."
It took only a week for O’Leary’s predictions to come true. Zhao pleaded guilty Tuesday to anti-money laundering violations, making a deal with the Justice Department. Along with Zhao’s $50-million fine, Binance pleaded guilty to criminal charges and faces a $4.3-billion fine.
The government was well aware that Binance didn’t comply with U.S. regulatory requirements and prioritized growth over compliance.
"I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself," Zhao said in a tweet.
Zhao now faces a sentence of up to 10 years and fines of up to $500,000, plus any profits he made from the alleged scheme. His sentencing will be delayed by six months.
The Last Word: Reflecting on the growth potential for crypto, O’Leary drew parallels with the frontier of the Wild West. Just like the Wild West, the crypto market needs a sheriff to reach the next stage of adoption, he said.
“There’s not going to be any Bitcoin ETF until there is an exchange that is compliant with the SEC,” O'Leary said, pointing out the compliance pre-requirements for crypto to participate in the multi-trillion-dollar market that encompasses the largest institutions like pension or sovereign wealth funds.
Related Link: EXCLUSIVE: Kevin O’Leary Says There’s No Reason To Get Excited About Bitcoin ETF Without Regulatory Clarity
Anthony Pompliano, left, and Kevin O’Leary at the Benzinga Fintech Deal Day & Awards Nov. 13 in New York City. Photo by Pratya Jankong.
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