CRYPTO BLAST: Maintaining our constructive crypto market outlook but uncertainty at Binance & OKEX take us from cautious to sell on exchange tokens while we see greater CME market share – that’s GOOD NEWS


We are long term bullish on the overall crypto market but see pockets of the industry that offer greater risks than others - exchange tokens are one of them.

In a previous report (Regulatory Actions Highlight Risks But Market Remains Bullish), we urged investors to carefully consider risks associated with assets in the offshore exchange token sector, and specifically Binance (BNB), due to its historical allegations and actions taken by US regulators against the derivatives exchange BitMEX.

A week later, the CEO of one exchange token we listed, OKEX (OKB), was taken into custody by Chinese police, leaving user funds unavailable for withdraw since October 16th and causing the value of its token to drop by over 30% on the news.

Yesterday, a Forbes staff reported on leaked documents that allege Binance “conceived of an elaborate corporate structure designed to intentionally deceive regulators and surreptitiously profit from crypto investors in the United States.” The reports are unconfirmed by the company, but the news underscores our prior concerns from industry rumors and calls for caution on BNB’s token and the sector in general.

The total crypto market cap excluding stable coins is roughly $380B, which makes exchange tokens at roughly $9B ~2% of the market a sm...

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