Adjunct professor VU Amsterdam: Binance, FTX deal encounters problems

At the moment, one topic dominates the crypto news; the situation regarding crypto exchange FTX and its acquisition by Binance. The latter broke the news yesterday that it wants to pull FTX out of the mud by taking over the exchange completely. While many crypto investors are now breathing a sigh of relief as a bigger collapse appears to have been averted, an actual takeover is far from certain. Crypto Insiders early Thibault Schrepeladjunct professor of law at the VU University Amsterdam, for a comment.

Binance and FTX Face Antitrust Laws

It seems so simple; Binance buys FTX and Kees is done. Unfortunately, things probably won’t go as smoothly for the big yellow giant. Since Binance is the world’s largest exchange, and FTX itself is also in the top 10 in terms of trading volume, Schrepel says the deal will likely cross an antitrust threshold in all relevant jurisdictions. What does this mean?

“The transaction is above the EU notification thresholds, which means the companies need a green light from the European Commission. Should they announce the acquisition in the coming weeks (which is unusual, as pre-notification usually takes months for such transactions, time to collect all documentation, start the competitive analysis, etc.) then the European Commission has 25 working days to analyze the deal. .”

The reason that the EU, among others, will want to look at the deal has everything to do with antitrust. “The antitrust policy consists of the prohibition of corporate cartel formation, the prohibition of abuse of dominant position and the supervision of mergers,” the statement read. website of the Ministry of Foreign Affairs. Given the positions of Binance and FTX, one cannot just take over the other. This could create an unfair dominant position.

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Exchanges can get a hefty fine

If the two crypto exchanges continue their activities, this could have serious consequences. For example, Schrepel said: “Should the two companies coordinate their market behavior – for example to keep FTX alive – they would risk forming an illegal cartel, which is often considered the most serious violation of antitrust rules.”

Earlier, Schrepel on Twitter know that “jumping the gun,” In other words, making a false start can result in hefty fines. In some cases this can be as much as 10% of the total turnover of both parties.

Did Binance Cause the Collapse?

Schrepel is the author of the book Blockchain + Antitrust: The Decentralization Formula and therefore knows a lot about all the laws and regulations that now come into play for Binance and FTX. According to him, Binance can get the deal through by stating that it wanted to rescue a failing company. But then the question arises, who caused the FTX to fall over?

“The question will be whether Binance played a role in FTX’s possible bankruptcy, knowing that Binance started divesting its FTT (FTX Token) holdings earlier this week.”

Binance could then cite Coindesk’s previous disclosures as the reason for selling its FTT. Based on Schrepel’s statements to Crypto Insiders, the book seems far from closed, and it certainly won’t happen in the short term. The turmoil in the crypto industry is likely to continue until there is more clarity about the acquisition.

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