Crypto Week: An Unexpected Binance Move

August Non-Farm-Payrolls expectedly tuned out to be not very positive. The booming labour market in the United States has started to cool down, making the Federal Reserve (Fed) less likely to accelerate interest rate hikes during its next meeting later in September. The unemployment level in August jumped from 3.5% to 3.7%, while the average hourly earnings slowed down from 5.6% to 5.2%. This would enable corporates to hire employees more easily without offering significant wage rises. If inflationary pressure also slows down the Fed may decide to raise interest rates by 50 basis points instead of the widely expected 75 basis points.

This data had minor effects on financial assets. The S&P 500 broad market index first edged higher, but went into a downside correction this week. Cryptocurrencies ignored this data, as investors were expecting such developments in the U.S. labour market. Bitcoin was trading around $20,000, but dived to $18,500 on Wednesday morning. The digital coin is looking to hit $17,500 soon. Whatever the case, no data is likely to wander the Fed from it tightening path in the long-term.

Binance, the largest crypto exchange, announced that it would be forcing the conversion of USDC, USDP and TUSD tokens on clients’ Binance accounts to Binance USD (BUSD) as 1 to 1. This decision would be enforced on September 29. Clients will still be allowed to withdraw money in these tokens, but all trading operations will only be conducted in BUSD. Binance said it would rise liquidity and trade efficiency. But the exchange is seemingly willing to limit the circulation of alternate tokens as the most popular token, USDC, is connected to rival Coinbase crypto exchange. We may expect Binance to remove crypto pairs with USDC in the foreseeable future.

Fear, uncertainty, and doubt (FUD) over a possible MTGox related Bitcoin sell-off has squeezed investors. Another large operation of 5,000 BTC with the involvement of ‘sleeping’ wallets since 2013 was spotted a few days ago. MTGox refuted such an operation in relation to the exchange payouts, and long-lasting trial, but some on chain analysts are convinced of the opposite. The situation is evolving as investors are trying to connect the recent extradition of Alexander Vinnik, who was charged for laundering over $4 billion of Bitcoin through BTC-e crypto exchange. The U.S. Department of Justice said he has also obtained some funds from MtGox hack and laundered them too. MTGox was operational at the same time with the infamous Silk Road drugs black marketplace, many rumors about a possible connection between these two are still circulating in the market.

Investors would hardly find out the truth about such suspicious transactions. The fact is that no schedule of payouts to MtGox that may affect clients have been approved yet. So, no one is expected to dump such huge amount of BTC. So, there is no reason to panic.