Apparently, the”Fight of the gods” has put bitcoin holders around the world through a psychological test. “Rescue attempt”, will lead to FTX accelerated fall, will undoubtedly intensify the already nervous encryption circle nerve. Whether or not there will be a bigger collapse in the future, and what will sustain the continued strength of cryptographic assets, to be or not to be, is a real question
Binance abandoned the acquisition of FTX, is the beginning of tragedy? Hope to continue?
Why did Zhao Changpeng give up the acquisition?
It is true that Mr. Zhao Changpeng has both business vision and business skills in the international crypto asset industry. So, this time to give up the acquisition, in the end is really as its statement to the media in general? I’m afraid it’s not that simple.
There is no denying that the FTX itself has serious legal problems, prominent moral hazard, financial accounting confusion, unreliable audit results, and even rumors of possible criminal problems such as the transfer of client assets. FTX’s own compliance situation is indeed very difficult to salvage, involving the territorial principle of more than three countries and global customer recourse jurisdiction issues, in order to completely deal with the law clean, comparable to Shu road.
At the same time, in business terms, it is not surprising that by exposing the compliance problems of the target companies, the chain reaction results in lower prices being the norm in the business world. The strange thing is that in the crypto world, where the anti-vulnerability is so bad, the crypto world, the big guys, are essentially tied together in the same boat, and if one of them gouges the port side of the boat, well, the whole ship will sink. Logic is not difficult to understand, that encryption assets are regarded as safe-haven assets, but with a high proportion of hyped customers, it is extremely easy to form a“Stampede Event”, and the ecology is fragile, easy to be stigmatised, and glory, one loss leads to another.
- CZ “killed his throat with an arrow”, SBF’s US$15.6 billion may be cleared overnight
- Will the FTX incident be the “last straw that broke the camel’s back”?
- The epic reversal of the plot, CZ announced that it will completely acquire FTX
In fact, there is an important factor, we have to mention, that is: Anti-monopoly investigation.
In the United States local, for this acquisition, some industry insiders think it is a hostile takeover, but no real, we can not judge. However, there are real legal risks to monopoly. The implementation of a monopolistic act that should be declared according to law and that is not declared may trigger an anti-monopoly investigation, the types of monopoly behavior mainly include monopoly agreement, abuse of dominant market position, concentration of operators, abuse of administrative power to exclude or restrict competition, etc. , the most directly related with the alliance acquisition of FTX is the concentration of operators, whether there may be other types of monopoly behavior, need to judge according to the specific circumstances of the acquisition.
Both Binance and FTX are cryptocurrency exchanges, and Binance has a spot market share of more than 50% . This control acquisition is a typical horizontal acquisition, so, the direct effect of the acquisition is that the market share of Binance will expand, competition will decrease and the dominant position in the market will become more obvious, failure to file could trigger an antitrust investigation.
The administrative punishment measures and the intensity of the punishment for violating the anti-monopoly law are different in different jurisdictions. The cryptocurrency transaction is a global market, and Binance and FTX also serve global customers, so if Binance does buy FTX, it may trigger antitrust review in many countries or regions. Take the United States as an example, according to the U. S. “Sherman Law,” serious violations of the anti-monopoly law enforcement monopoly behavior, may face a huge fine. If they break the law and are fined in the United States, then it is possible that Mr. Qian and Mr. Zhao themselves are“Not welcome” in the United States. We think this may also be a reason to give up the acquisition in the end.
Second, MA, the cryptocurrency exchange, is also taking the conventional international M & a routine
It seems to be the initial ideal of a more transparent and fair economic ecology and financial system for the global believer in cryptography. However, exchanges that provide liquidity to all are also operated by physical companies, whether incorporated in Malta or the United States or Singapore and HK.
After checking the information found that FTX registered as a Antigua and Barbuda, the follow-up headquarters to the Bahamas, the main camp in the United States. Cunningham is headquartered in Malta. Because both companies have major US operations, they fall under the jurisdiction of the US SEC probe.
Assuming that Zhao Changpeng’s merger has not been abandoned, or restarted after an investigation by the US SEC, then its operation plan is basically as follows (specially consulted our team Dr. Zhang Changdan, Dr. Zhang is familiar with the International M & a business, she introduced the company’s acquisition process includes the following links) :
The first step is preliminary consultation. The two parties to the transaction have reached a preliminary intent on the acquisition and signed an intent agreement. This is what Zhao Changpeng revealed in the news, and Sam reached a non-binding letter of intent. In some corporate acquisitions, the seller may require the acquirer to pay a certain amount of money in good faith to confirm the acquirer’s bona fides; if it involves acquisitions that are subject to disclosure or pre-vetting by regulators in accordance with the law, the parties need to disclose and submit for approval at the stage of signing the intent agreement;
Step Two, due diligence. The acquirer shall conduct business, financial and legal investigations into the subject matter of the proposed acquisition, and assess the asset value and acquisition risk of the subject matter of the proposed acquisition; The acquirer may, in accordance with the expectation of the acquisition, carry out the necessary internal decisions (such as shareholder (General-RRB- meetings, board decisions) and external approval procedures at the same time or after the conclusion of the investigation and evaluation; Many countries have strict restrictions on the acquisition of companies operating or registered in their own countries. Let’s take the example of the old Western country, the UK, which wants to buy a British company, under the National Security Act and the Investment Act, the Secretary of State has the power to block or limit transactions that design national security issues, or, if Unfair competition issues are involved, the competition and Market Authority will have to set up a separate card for another round of vetting, and if the target company is a financial institution, the FCA or the PRU will have to approve it separately. That is to say, readers should not think that the laws of common law countries will allow subjects to buy and sell shares of companies at will. No country is an outlaw, and there are laws, regulations and rules, even tradition.
Step Three, negotiate. To carry out consultation and negotiation on acquisition methods, acquisition conditions and transaction documents in accordance with the results of investigation, assessment, decision-making and examination and approval;
The fourth step is to sign the acquisition contract and amend the Articles of association. The entry into force conditions are usually stipulated in the acquisition contract. The common entry into force conditions include the internal decision-making and external approval procedures required by the parties to complete the acquisition;
Step 5, delivery. Including payment, replacement of director, transfer of seals and certificates, transfer of management rights, stock or property ownership change registration, record procedures, etc. .
The above-mentioned steps can be merged or further refined, and the first four steps may be initiated successively or simultaneously, which need to be flexible according to the specific circumstances of the acquisition project. The length of the acquisition cycle varies from project to project. If the transaction is very simple, the acquisition of the subject matter of the situation is very clear, may be a month or two to complete the delivery; However, if the transaction model is complex, the size of the target or complex circumstances, the decision-making process to be performed complex, and so on, the entire acquisition cycle may take several years.
FTX is a cryptocurrency trading platform, its liquidity crisis is closely related to its issued tokens, its own balance sheet structure, and tokens market environment and other external factors. This acquisition cycle is too long on its possible impact on many aspects, whether it will affect its liquidity needs to combine internal conditions, external environment and other factors to consider. But overall, if the acquisition cycle is too long, the FTX will face more uncertainty, which may deepen its liquidity crisis, but not necessarily.
Fraud, fraud and jurisdiction
Whether the acquired party is suspected of fraud or fraud also needs to be clarified. One thing to remind you of is the boundary between simple civil fraud and criminal fraud. At present, the mainstream view in the field of criminal law is still“The theory of important matters”, that is, “If the other side of the transaction know the true situation would not carry out the disposition of the property, but to fabricate such facts, such behavior is a criminal fraud.”.
Although some scholars have emphasized in recent years that the principle of modesty in criminal law should be brought into play, and the scope of the determination of criminal fraud should be limited on the issue of the demarcation between civil fraud and criminal fraud, but there is a gap between the judicial practice and the dispute in the criminal law circle. In fact, as far as the judgment view of judicial practice is concerned, the currency circle trading platform occurs“The donation escapes” the incident, will probably be determined its supervisor constitutes the fraud.
She still reminds us of the jurisdiction of our criminal law, which is especially important for overseas Chinese. The jurisdiction of crime in our criminal law is based on the principles of territorialism, personalism and protectionism, the personal doctrine is stipulated in the seventh article of our country’s criminal law. Article 7(1) provides that, “This law shall apply to Nationality Law of the People’s Republic of China who have committed a crime under this law outside the territory of the People’s Republic of China, but the maximum penalty provided for in this law shall be fixed-term imprisonment of not more than three years.”, even if not in our territory, as long as it still has our citizenship, then subject to our criminal law regulation.
And from the current“Coin circle” trading volume and trading situation, once involved in cases, the amount is often found to be“Huge” or“Especially huge”, and the“Huge amount” of the crime of fraud stipulated in our criminal law can already constitute the sentencing range of more than three years of fixed-term imprisonment. According to the provisions of the first paragraph of article 7 of our criminal law, must be investigated for criminal responsibility, must not be careless!
Write at the end
SA recently read the International organization-the Financial Stability Board for cryptographic assets related documents, found that in fact the G20 for cryptocurrencies and cryptographic assets have always been vigilant.
In the future, with the change of countries’ acceptance and attitude towards cryptographic assets, some countries and regions may begin to expel the cryptographic assets industry; some countries and regions may start to welcome and tolerate the cryptographic assets industry. Whether it’s Poh County, which sells friendly policies, or Malaysia, which has won out on the cost of living, or HK, which is on the rise, there’s nothing wrong with the crypto-asset industry looking for legal and policy hollows around the world, but it is important to understand the boundaries of national laws and the attitude of international organizations towards the financialization of encrypted assets, so as not to become a street rat who will only dare to fly direct and fear landing in certain countries and regions.
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