Binance Offices Raided and XRP undertakes Token Burn

Binance Offices Raided and XRP undertakes Token Burn

If you ever wondered how the dot com era ended it wasn't anything like we are witnessing currently and it was more or less like a big collapse with only a few major players remaining.

In short a heap of companies launched and only a handful made it creating what we know today of the internet such as Google, Amazon, eBay etc. But what we are witnessing with crypto currency is an entirely new ball game.

What has happened in a rapid succession is the Securities and Exchange Commission not just the American SEC, but their equivalent all around the world go in hard on current centralised exchanges.

While regulators enabled tech giants to become tech giants in the dot com era, it doesn't appear that same approach is being applied in the current era of fintech. While many operators have gone untouched purely because they are too small. The larger centralised exchanges like Binance are being directly challenged by governments.

The Australian Securities & Investments Commission (ASIC) has raised Binance Australia offices after many warnings from the regulator for breaching financial services licensing agreements.

Illegal Derivatives Trades

The raid was in relation to the recent derivatives Binance was offering Australians and while this might confuse a lot of people what Binance offered was the ability to trade on the future price of digital currencies.

Traders could establish an agreement to either buy or sell a digital asset at a future price through an agreement where by say a seller speculates Bitcoin will be worth $35,000 in 3 weeks time. The seller than has to sell the asset for that much at that time and if there is a buyer a buyer will be matched.

If there is a bull run and the token is selling for more the seller misses out and obviously the buyer sustains a good win. This is a massive over simplification of the topic but this is what governments are alleging Binance breach their licenses on.

It is also what Black Rock and many other mainstream brokerage firms are entering so there is a direct benefit for mainstream traders if the SEC and it's counterparts across the world are successful in shutting down Binance.

A Business Model Worth Investing in

Yesterday we discussed how The SEC was open about wanting to shift people to current industry providers because it was the easier option for them to regulate. But given that Crypto currency is relatively new it will be interesting to see how Binance hit's back against all the action considering there is loose evidence and omissions that the only reason why the SEC and governments are doing it is to make it easier.

XRP Token Burn

Yesterday we also discussed the removal of XRP tokens from escrow which were keeping the sector on edge due to the unknown direction of the tokens. As the tokens being sold on the open market could potentially cause damage to the total value of XRP.

Given there are current court cases for the token you never know what could happen and in this world we have seen people do some odd and crazed thing. Would Ripple mass dump and run? Although that is an unlikely scenario as the company has steamed full head into battle, things have gone pair shaped in the past.

But this doesn't seem to be the case with recent information being released that XRP total supply is actually reducing which indicates the company may be shrinking it's supply.

image source

XRP Shrinking Supply

In a recent tweet it has been identified that for the past 30 days XRP has appeard to become deflationary with 247,000 tokens burned which equates to just over 8000 tokens per day.

Now it isn't a large amount of tokens considering XRP has a large circulating supply but it does put the company on the radar for many who are watching closely. If this continues to occur which is only by deleting current wallets not buying back the token. The shrinking supply could potentially add additional value to the project.

The question remains if Ripple Labs will be buying back XRP off the open market to burn more tokens or develop another unique way of token reduction.

If this is the case with what we are seeing with Binance we could potentially have a new 3rd sport contender in the making. but we will have to wait and see.

image sources provided supplemented by Canva Pro Subscription. This is not financial advice and readers are advised to undertake their own research or seek professional financial services.