“Unfortunately, a lot of misinformation has spread about our company, and we would very much like to make adjustments.” declared the chief strategist of the largest exchange Binance, Patrick Hillmann, in a comment to Forbes journalists, refuting allegations of money laundering, which the publication wrote about a few days earlier.
A series of revealing publications about the largest crypto exchange coincided with the fall in the price of bitcoin and other crypto assets, including the exchange’s own coin – BNB, writes RBC Crypto.
In the same Forbes, a week earlier, an investigation was published where Binance was accused of allegedly directing part of the stablecoin collateral for undisclosed purposes, leaving users without covering their deposits. The head of the exchange, Changpeng Zhao, openly commented on the article, referring to “deliberately distorted facts” and “emphasis on his ethnicity.”
Later on the Binance blog appeared publication with details about the technical side of the exchange with wallets and reserves. The text confirmed that the process of managing those tokens that the journalists wrote about “was not always perfect”, but this “did not affect the security of the funds of the exchange users in any way.”
Binance is not the only major player in the crypto market whose activity becomes the object of attention of journalists from well-known American business publications with relative regularity. The Wall Street Journal published on March 3 investigation about the issuer of the largest USDT stablecoin, Tether. Referring not to sources, the journalists listed several cases in which the company’s management allegedly provided fake documents to banking partners at various times.
The material created a resonance in the crypto community. Tether has published an official refutation statements of journalists, urging not to respond to “rumors and disinformation”. Tether CTO Paolo Aordino, in his personal accounts on social networks, without hesitation in expressions, called the materials of the publication “clownish”, commenting on them in a similar vein not for the first time.
Four hours after the publication of the WSJ, the bitcoin rate fell by $1.2 thousand in less than an hour, and the total capitalization of the crypto market decreased by $60 million. Earlier in the day, it became known about the problems of the Silvergate bank, which provided a gateway for dollar payments thousands of cryptocurrency companies, the largest of which hastened to publicly declare a break in relations with the bank.
“Trend to Discredit”
Analysts call what is happening in the media an information campaign against the crypto sector. According to Bestchange.ru Senior Analyst Nikita Zuborev, there is a noticeable tendency for the US to discredit crypto projects. Since the most “media-successful” crypto companies are Binance and Tether, it is against them that campaigns are being launched to worsen their reputation, the analyst believes.
Tether and Binance, being one of the largest and at the same time non-public companies on the market, are “sort of tidbits” for journalists, Taisiya Romanova, a crypto expert and author of the GFiS Channel telegram channel, agrees. The status of a non-public company really gives them the opportunity not to disclose the financial aspects of their business and leaves room for speculation on those “crumbs of information” that fall into the public field. This does not mean that there are no and cannot be questions about the activities of the companies themselves, the expert clarifies.
A possible reason for the mass negative publications could be the fact that “some forces in the United States are aimed at limiting any uncontrolled cash flows in the cryptosphere,” Zuborev admits. Unlike U.S.-registered crypto exchanges, large financial ecosystems that operate outside their jurisdiction may, according to regulators, directly threaten the interests of the country.
Market impact
In each case, representatives of both companies spoke directly about a custom-made program of smearing in the media. In January Zhao named the bankrupt FTX exchange, whose representatives allegedly allocated $ 43 million for the publication of negative materials, was a likely customer. Both Tether and Binance call accusatory publications the term FUD and suggest ignoring any manifestation of it.
Publications in the media act as a tool in creating a certain narrative in the market, Romanova notes. Many market participants use algorithmic solutions to analyze sentiment in publications and social networks, and they use this both for the purpose of earning money and for the purpose of “provoking other participants” in the market, especially retail investors.
Santiment’s analytical resources are able to monitor the “mood” of the market by monitoring the mention of keywords in thematic publications on social networks. After the release of the WSJ material about Tether in Santiment noted “an unusually high level of negative sentiment towards cryptocurrencies” and “one of the highest levels of FUD” ever recorded by the company.
By metrics Santiment of March 7th, traders and holders of the leading cryptocurrencies are “still skeptical for now.” As soon as FUD volumes in the market subside, this may serve as an indicator of the growth of crypto assets, the company’s analysts believe, based on historical experience.
Such newsbreaks rarely have a long-term effect, they only “slightly increase the amplitude of local trends”, but in reality they have almost no effect on the market, the analyst explains.
If we talk specifically about the concentration of such news, it is quite natural that in moments of prolonged stagnation there are much more of them than in days of stable growth, so there is a certain correlation between the increase in the FUD factor and the end of the global downtrend. But it is impossible to predict the behavior of the market based on this factor; there are no qualitative or quantitative indicators to assess the depth of influence on prices. This pattern can only be verified retrospectively, so this fact is of no practical use, Zuborev summarizes.
In such a high-risk area, there is always the possibility that the next FUD without convincing evidence will actually turn out to be true, as was the case with FTX, notes Taisiya Romanova. It is impossible to protect yourself 100% from this, so it is important to pay attention to risk management when trading crypto assets.
Source: Cryptocurrency
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