Binance’s BNB Recovers Despite Price Manipulation Accusations14. Juli 2023
• Binance’s native token, BNB, has dropped by around 20% due to regulatory issues since June 5.
• Market analysts have accused Binance of manipulating the BNB market by selling BTC for USDT reserves and using it to buy BNB.
• Critics believe that these cyclical exchange movements are a form of market manipulation.
Binance’s Regulatory Troubles
It’s already common knowledge that Binance is in a regulatory mess. Notably, the exchange received a lawsuit from the US Securities and Exchange Commission (SEC) on June 5. Since then, Binance’s native token, BNB, has dropped by around 20%.
Market Manipulation Accusations
In June, market analyst ’52kskew’ accused Binance of manipulating the BNB market. The analyst estimated that Binance had sold its Bitcoin (BTC) holdings for Tether (USDT) and had channeled the proceedings to buy BNB. Furthermore, 52skew noted that Binance converts its BNB holdings to BUSD, its native US dollar-pegged stablecoin. Then, the exchange converts its BUSD to repurchase Bitcoin and USDT, effectively concluding the cyclical exchange process. In the analyst’s opinion, these cyclical actions classify as market manipulation.
What is Market Manipulation?
Market manipulation in the context of cryptocurrencies refers to intentional activities aimed at artificially influencing the price or trading volume of a cryptocurrency or a group of cryptocurrencies for personal gain. In this case of cyclical exchange manipulation , it typically involves a coordinated effort by individuals or entities to create the illusion of market activity and price movement by continuously trading the same assets back and forth among themselves.
Binance Refutes Allegations
Binance refutes these claims by saying that these blockchain movements are natural. Nonetheless, critics continue to argue against them with some accusing them of propping up their own tokens like their native coin–BNB–to stimulate more market activity .
Since June 2023 when it faced legal action from SEC., each week brings with itself newer troubles for crypto giant–Binance . While some investors may be relieved at seeing short-term recoveries in prices such as 15% recovery in local lows seen in case of their native coin—BNB — other investors remain wary over allegations of price manipulation via artificial pumping techniques such as those described above.