The Week: Binance Restricts US Users and Facebook’s Libra Attracts High-profile Backers

Over the past week, looming Binance user restrictions brought more woes for altcoins, Twitter’s Jack Dorsey made the case for Bitcoin as the Internet’s native currency, rumours suggested Visa, Mastercard and PayPal are lined up to support Facebook’s new stablecoin, and Chinese media were fooled by a parody article claiming Kik’s founder had received an overly-harsh sentence.

Binance moves towards US regulatory compliance

Binance announcedit has joined forces with BAM to launch a separate exchange venue for US investors. The move indicates an attempt by the altcoin exchange to comply with stringent local securities laws. Consequently, US investors will be geoblocked from accessing the global site, Binance.com.

Facebook’s Libra coin set for testnet

Facebook’s much-anticipated stablecoin, Libra, has moved a step closer to reality. Detailshave emerged ahead of the company’s official unveiling, suggesting Libra will be backed by “a reserve of real assets” in order to provide a coin that offers users “stability, low inflation, global acceptance, and fungibility.”

Bakkt announces test launch

Bakkt, the Bitcoin futures exchange supported by the Intercontinental Exchange (ICE), has announcedits moving into testing in July. The platform, which will settle contracts in Bitcoin (rather than the cash settlement used by CME) is considered a major step forward in laying the path for greater institutional investment in the asset.

The long take

It’s been a good year for Binance, and for its global army of supporters. Its IEO platform Binance Launchpad, which has launched five projects so far this year, has become the most desirable venue for crypto fundraising and has helped bring a wave of excitement back to the altcoin markets. In addition, the company launched its own blockchain - Binance Chain - and has made significant developments in the launch of its DEX and margin trading products. Combined, these advances have helped to propel the platforms reputation, along with the price of its native token, BNB. Sentiment around Binance has been so positive that even the theft of 7,000 BTC in early May served only to bring a temporary period of downtime on the exchange and no lasting impact on BNB.

Its latest announcement, however – the launch of a US-targeted exchange platform in collaboration with BAM – hasn’t been met with the same level of enthusiasm. The move may be a significant step in the exchange’s efforts to meet the stringent demands of US regulators, but it will likely have a negative impact on the platform’s trading volumes. This is due to the strict limitations that are expected to be placed on the range of assets it can offer to US users. As part of the launch, US-based users will be ‘geo-fenced’ into accessing only the US platform, which will require mandatory KYC for meaningful trading activity. To comply with US laws, Binance may have to restrict the sale of certain assets that could be deemed securities – possibly even its own native asset.

Founder CZ has been characteristically relaxed on the matter, though perhaps more careful with his words than usual. He no doubt feels some nervousness at the prospect that a quarter of his exchange’s current user base – and possible an even higher proportion of its trading volumes – may be stifled by the new requirements. While details on the full extent of the cull are yet to emerge (CZ himself may shed some light on this during his upcoming AMA), traders have already begun selling off lower cap altcoins, which could feel the brunt of the changes. The selloff may however prove a boon for higher cap alts, which are typically listed across a broader set of exchanges and therefore won’t have the same liquidity issues. Is it ‘RIP alts’ or the beginning of a maturation period for the crypto markets? Only time will tell.  

Tweets of the week

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