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In recent weeks, Binance, one of the cryptocurrency trading platforms, has been in the crosshairs of US judicial authorities due to accusations of embezzlement. The case adds to the recent bankruptcy of another giant: FTX, which left thousands of users without money. We explain what to take into account when investing in digital assets to secure your money.
On November 28, 2023, investors withdrew around $956 million from the Binance platform, after the company’s president Changpeng Zhao resigned and began his prison sentence after pleading guilty in an investigation into illicit finances.
Authorities had been investigating Binance and Zhao, a resident of the United Arab Emirates (UAE), since 2018, who entered his guilty plea in a Seattle court at the end of November.
The leader’s departure marks a dramatic outlook for one of the most powerful figures in the cryptocurrency industry.
The Binance case joins that of FTX, whose founder and CEO, Sam Bankman-Fried, was found guilty of seven counts of money laundering and fraud after declaring the company bankrupt and withholding the money of thousands of investors who were users of the platform.
FTX became the third largest cryptocurrency market in the world valued at $30 billion. It was the platform on which many cryptocurrency investors traded similar to the New York Stock Exchange for stocks.
Against this backdrop, Eloisa Cadenas, general director of Monetae Exchange, a platform regulated by the Central Bank of El Salvador, maintains that to invest it is necessary to know the market and how these platforms act, thus preventing possible judicial investigations.
It is very important that people, when they want to make investments or want to buy a crypto asset, know the platform in which they are going to deposit their funds, says Cadenas.
Along the same lines, he added that the crypto business has a common denominator, which is trust in the platform in which an investor allocates their funds.
The specialist stressed the importance of working with platforms “that are regulated.” At the same time, she recommended that investments be made in “local or regional” companies and not in a massive market such as Binance, due to the possibilities that a user has of contacting the operations center in the event of an emergency.
With Reuters
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