Twitter user @Cardanians_io has explained to Crypto Twitter why Cardano is much better protected against the fate of FTX and the troubles that hit another major crypto exchange, Binance, yesterday.

@Cardanians_io reminded the community that the founder of FTX, former billionaire Sam Bankman-Fried, was taken into custody in the Bahamas just recently at the request of U.S. prosecutors.

The arrest took place before SBF was able to testify before the U.S. Congress about the collapse of the FTX exchange in early November.

SBF arrested, Binance may face charges too

As covered by U.Today earlier, Binance may face charges of money laundering and violating sanctions from the U.S. prosecutor’s office, according to a report by Reuters.

Head of Binance, CZ, commented on this news, calling it FUD. However, investors began to withdraw funds from the platform – mainly Ethereum and ERC20 tokens – for fear of Binance repeating the fate of FTX and SBF.

Over the past week, investors and traders have withdrawn roughly $2 billion worth of cryptocurrencies.

@Cardanians_io stated that unlike FTX and Binance, Cardano is a decentralized network that does not have a CEO. Therefore, “There is no one to arrest.”

SBF is under arrest. Chances are CZ will also be arrested as @Binance is accused of money laundering. This bear market may destroy the 2 largest exchanges in the #blockchain industry.#Cardano has no CEO. The network is decentralized and there is no one to arrest.

— Cardanians stake w CRDN3 (@Cardanians_io) December 13, 2022

BNB under selling pressure, price plunges

Prominent investor Mike Alfred has commented on the recent outflow of crypto from Binance. He tweeted that traders are selling their BNB and BUSD, converting them into Bitcoin and Ethereum or any other coin that can be withdrawn from Binance quickly.

Alfred pointed out that this is the first time in several years that there is a “real market driven price action” for the native coins of the Binance exchange.

He also tweeted that BNB, Binance’s coin, is plunging as selling pressure on it increases.

BNB $262. Dumping harder. Sell pressure up. I assume CZ is selling as well to meet redemption requests. Hot wallet balances drained.

— Mike Alfred (@mikealfred) December 13, 2022

Since the evening of Dec. 12, the BNB price dropped from the $284 level, reaching a $257.9 low. By now, the asset has managed to recover some of its losses and is trading at $269.2, as per CoinMarketCap.

BNB so far holds the fourth position on the top ten list here.

The plaintiff lost over $10,000 in 2018 amidst the Chinese Central Bank’s ban on financial institutions supporting crypto transactions

The High Court of China’s Northern Shandong province has publicly stated that investments in digital assets like cryptocurrencies are not protected by the law. The comment was made while the bench was reviewing the decision of the Jinan Intermediate Court on a fraud allegation involving virtual tokens.

The development is the latest setback for China’s crypto investment industry as the ruling sets a precedent for outlawing investment in digital assets like Bitcoin.

The plaintiff initially approached the Jinan city court claiming that he invested more than $10,000 to buy digital currency in 2017 on the advice of three friends.

However, the accounts that the plaintiff was transferring the funds to were closed down by the People’s Bank of China in its implementation of the ban on financial institutions supporting crypto transactions in 2018. This led to the plaintiff’s money getting stuck in the process, leading to him not receiving the money or the tokens.

The Jinan city court refused to grant relief to the plaintiff in January 2021, stating that the fraud allegation was untenable as digital assets had no legal status. The Jinan Intermediate Court upheld the verdict in March 2021, prompting the plaintiff to approach the Northern Shandong High Court. However, the high court reaffirmed the lower courts’ position and said in a public comment on the case that “investing or trading cryptocurrency isn’t protected by law”.

The statement by China’s judicial system comes just months after the nation began a crackdown on crypto-centric businesses and outlawed mining, prompting the country’s crypto mining industry to move to Africa and Central Asia.

While the above case did not lead to further legal action against the plaintiff, in a separate case in Zhenjiang city, eight individuals were arrested after they used Bitcoin to override the restrictions of withdrawing only $50,000 worth of foreign currency per year. The court stated that the Bitcoin exchange scheme where individuals use Bitcoin as a medium to exchange yuan with other fiat currencies like the South African rand resulted in transactions worth more than 1.4 billion yuan since 2019. Six of the accused were sentenced to prison as the investigation continues.

Such cases feed into the perception that the use of digital currency is prominent in committing crimes and further prompt stricter regulations by the historically crypto-adverse Chinese government. 

China’s Northern Shandong province high court has ruled against cryptocurrency in a recent verdict. The virtual token dispute involved an investment of $10,756 by the plaintiff. The litigant filed the case on his virtual token purchase in 2017. However, the ongoing Chinese crypto crackdown resulted in the plaintiff’s account closure by the People’s Bank of China in 2018. This came after the central bank, restated the ban on payment institutions supporting cryptocurrency transactions.

Shandong High Court favored Jinan intermediate court’s verdict in January this year. Jinan city court marked the plaintiff’s fraud allegation as unjustified, as digital assets lack legal status in the nation. This verdict was furthered by Shandong’s High Court on Sunday, clarifying that “investing or trading cryptocurrency isn’t protected by law”.

Chinese District Court argues BTC as Digital property

This verdict contradicted China’s District Court’s recent article on the protection of virtual property that is visible and intangible. Shanghai Minhang Court argued in a recently published article the status of Bitcoin as digital property. It elaborated that BTC is a virtual asset that is disposable, exchangeable, and exclusive.

Court highlights BTC’s high exchange value

Shanghai Minhang District Court argued Bitcoin’s high exchange valuation as a reason for its status as virtual property. This means that all resources, including property, and energy that are exchanged for BTC, are held as a higher exchange value, which further indicates its undeniable status as virtual property. Furthermore, the Shanghai Minhang Court emphasized that BTC is a virtual product as it is acquired through legal labor. Additionally, it is disposable, exchangeable, and exclusive. The court said that by gaining the status of a virtual commodity, BTC also attains the status of the virtual property.

However, Shanghai Minhang District Court also highlighted BTC’s lack of regulatory ground. While Bitcoin holds strong exchange valuation status, it falls short of monetary properties, resulting in an unsatisfactory status to be used as a currency in the country. The article mentioned the absence of legal compensation and compulsion as the reason for BTC’s unregistered status as a currency in the market.