FUD or regulatory change? Rumor clouds swirl around crypto exchanges

[Cordillerabit]

The mood of fear, uncertainty and doubt, otherwise known as FUD, that has gripped some of the largest cryptocurrency exchanges since October heightened last week — and it had nothing to do with the United States presidential election.

“Weird Binance fud Friday and weird huobi arrest fud today,” tweeted MyCrypto CEO Taylor Monahan, referring to an Oct. 29 Forbes report that Binance had set up its U.S. unit, Binance.US, as a regulatory decoy and referencing separate rumors that Chinese authorities had detained a senior executive at Huobi.

FUD, which has long dogged the cryptoverse, is commonly defined as misinformation intentionally spread to put a competitor at a disadvantage — to knock down a rival’s stock price or coin price, for example. It can also result from government action, such as the arrest by U.S. authorities of BitMEX’s co-founder and former chief technology officer on Oct. 1 or the reported detainment of an OKEx co-founder by Chinese police in early October. It raises speculation: Who is causing the FUD, and what is that party’s motivation?

Binance CEO Changpeng Zhao, for example, characterized the leaked document, which detailed the exchange’s purported 2018 plan to evade Bitcoin (BTC) regulation by setting up a U.S. subsidiary with a “feigned interest in compliance,” as FUD, adding: “The said document was not produced by a @Binance employee (current or ex).”

In any event, the FUD meter seemed to be rising last week, particularly as the Huobi rumors were accompanied by reports of large Bitcoin withdrawals at the Singapore-based exchange. Boxmining creator Michael Gu, for one, announced that he was removing his balances from Huobi "until this FUD clears up."

A global push to rein in crypto exchanges?
But was there anything behind all those events? Some have suggested that regulators worldwide — in the U.S. China and elsewhere — are now targeting centralized cryptocurrency exchanges, and that is what is causing all the doubt and uncertainty with regard to these largely unregulated enterprises.

Bobby Ong, co-founder and chief operating officer of CoinGecko, is skeptical that there was any such unified plan. As he told Cointelegraph, “The timing of all these FUD [events] seem to be coincidental,” with the charges against BitMEX being brought about as the result of a prolonged investigation.

Monahan, for her part, allowed for the possibility that regulatory actions could indeed be a key source of recent anxiety; but then again, it could just be rivals spreading rumors and innuendo about one another. Huobi’s coin, Huobi Token (HT), took a hit when the bad news broke, falling hundreds of dollars on Nov. 2. Monahan shared with Cointelegraph:

“It is interesting that we’ve seen so much confirmed and rumored regulatory action around the top futures/derivatives exchanges in the past month. However, it may be that we’re simply seeing an increase of FUD now that these exchanges have their own token — BNB, OKB, HT, etc. The FUD usually reserved for coins/tokens is now attached to the exchange itself.”

Source: https://cointelegraph.com/news/fud-or-regulatory-change-rumor-clouds-swirl-around-crypto-exchanges