The decentralized crypto prediction market, Polymarket, has opened a bet on the potential bankruptcy of the giant cryptocurrency exchange, Binance. Participants give approximately a 12% chance of Binance going bankrupt by the end of the year, and the rapid increase in probability within 24 hours has caused a great stir.
Two Conditions for Accepting “Binance Bankruptcy”
In the decentralized crypto prediction market, Polymarket, a bet has been opened on whether Binance will go bankrupt by the end of the year. 12% of participants believe that the major cryptocurrency exchange will go bankrupt by 2024. Although this rate seems low, the fact that there is a bet on the bankruptcy of Binance in itself is remarkable.
According to Polymarket’s website, the bet opened on July 17th will result in a “Yes” announcement if Binance.com declares bankruptcy or files for bankruptcy by December 31, 2023, 23:59. Additionally, if withdrawals of BTC or ETH are suspended consecutively for at least 7 full days (168 hours) for the majority of users until December 31, 2023, 23:59, the bet will result in a “Yes”. If none of these conditions are met, the bet will close with a “No” result.
The potential bankruptcy of Binance has reached a trading volume of $11.1 thousand so far, and this volume is gradually increasing.
Binance Going Through a Challenging Period
Although the situation of Binance’s US branch, Binance.US, is not taken into consideration in the bet, the statements made by CEO Changpeng Zhao (CZ) about this side last month were quite important. CZ made surprising confessions that the funds on the platform are not fully backed at a 1:1 ratio, as users expected. This situation has raised concerns about the platform’s solvency.
On the other hand, Binance’s global side is struggling with a series of legal obstacles that affect its operations. In May, the cryptocurrency exchange was removed from the records of the Financial Conduct Authority in the United Kingdom, and there are no authorized institutions left in the country. After the US Securities and Exchange Commission (SEC) filed a lawsuit against both Binance.US, Binance, and CZ for violating securities laws last month, it was claimed that the US Department of Justice (DoJ) is also preparing to file a lawsuit.
Binance, which had to cease all activities in the Netherlands, is facing a money laundering investigation in France.
