Binance Faces Criticism From Jim Cramer Over “Sketchy” Label
Binance, the world’s largest cryptocurrency exchange, has been hit with a lawsuit by the Commodity Futures Trading Commission (CFTC), accusing both the exchange and its CEO, Changpeng Zhao, of various violations. The lawsuit has caused some to lose trust in the firm, while others have continued to support it. CNBC host Jim Cramer is among those who have lost faith in Binance, calling the firm “sketchy” and claiming that he would never work with them.
After listening to Tim Massad on last night's show (former head of the CFTC) I would not do business with Binance. Just way too sketchy
— Jim Cramer (@jimcramer) March 31, 2023
CZ’s ‘Sketchy’ Response
Cramer has a history of making predictions and comments that often don’t come true or have the opposite effect. In response to Cramer’s tweet, CZ, as Zhao is known, posted a chart highlighting Binance.US’s trading volume, which had surged to an all-time high. CZ pointed out that the firm’s U.S. wing alone accounted for 41% of Coinbase’s global trading volume over the last week.
However, some Twitter users pointed out that trading volume includes both buying and selling activity, and urged CZ to focus on net inflows. In the wake of the CFTC lawsuit, Binance saw increased withdrawals, with outflows worth $2 billion following the legal action.
Sharing some public data. @BinanceUS (NOT including https://t.co/ukvU1dlpOt) weekly trading volume reached 41% of Coinbase's (global) trading volume last week. An ATH. pic.twitter.com/DMY8f64Eab
— CZ 🔶 Binance (@cz_binance) March 31, 2023
Regulatory Challenges
Despite the increased withdrawals, CZ and Binance have been transparent about the firm’s trading volume, acknowledging both the positive and negative effects of the CFTC lawsuit. While some community members continue to support Binance and CZ, others remain skeptical about the firm’s future.
The regulatory issues facing Binance are the latest in a series of challenges for the exchange, which has faced criticism for its lack of transparency and legitimacy. However, Binance has continued to operate and expand, with the firm’s U.S. wing seeing record trading volume in recent weeks.
As the cryptocurrency industry continues to evolve, regulatory issues are likely to remain a concern for firms like Binance. The exchange and its CEO will need to address these challenges and work to regain the trust of investors and regulators alike.
