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Five things in crypto this week: Binance, NFTs and the Walmart hoax

In another busy week for cryptocurrencies, Binance, dogecoin and non-fungible tokens took the spotlight.

As regulators continue to clamp down on the sector, some of crypto’s largest businesses including Binance and Coinbase are making moves to get on the right track.

Several scandals also took centre stage this week, including a case of insider trading at a major NFT marketplace and a litecoin hoax that had several major news outlets fooled.

In case you missed it, here’s five things that happened in crypto that you should know about.

Binance eyes restructure

Binance is to build itself a permanent headquarters after regulators took issue with the lack of transparency about how its business is structured, marking a major shift away from decentralisation.

The cryptocurrency exchange, which has no clearly defined headquarters but instead operates across a global network of offices, has come under fire from watchdogs such as the UK’s Financial Conduct Authority for refusing or being unable to answer questions about its make-up and senior executives.

Binance’s chief executive Changpeng ‘CZ’ Zhao said the business will soon transition to a new structure to meet regulatory demands.

“As we run a centralised exchange, we have come to realise that we need to have a centralised entity to work well with regulators,” said Zhao in a 16 September interview with the South China Morning Post. “We need to have clear records of stakeholders’ ownership, transparency and risk controls.”

READ Binance CEO eyes restructure to quell regulators’ concerns

The FCA banned Binance’s UK entity, Binance Markets Limited, from operating in the country in June, joining a chorus of regulators in Japan, Hong Kong, Italy and elsewhere making similar decisions.

Binance’s global website was also recently placed on an investor alert list by the Singaporean financial regulator, though its local subsidiary is permitted to continue operating while its application for a payment services licence is assessed.

NFTs face first major insider trading scandal

OpenSea, one of the most popular platforms for trading unique digital collectibles created on blockchain networks known as non-fungible tokens, asked one of its senior staff to resign this week after the marketplace faced allegations of insider trading.

Nate Chastain, OpenSea’s head of product, stepped away from the business on 16 September following allegations of misconduct that had emerged days earlier.

A thread on Twitter had claimed to show evidence of Chastain front-running popular NFTs before they were listed for sale on OpenSea, citing several Ethereum digital wallet addresses linked to the insider.

The Twitter user alleged that Chastain would buy digital artworks that he knew were soon to be featured on OpenSea’s homepage, and then put them up for sale once the increased promotion had driven up their price.


OpenSea said it had “requested and accepted” the resignation of the employee responsible for violating its rules on 16 September, without naming Chastain.

Chastain’s own Twitter bio also changed to say he was no longer working for OpenSea that day, and one of the marketplace’s co-founders confirmed to CoinDesk that Chastain was the person asked to resign.

“Upon learning of this conduct, we immediately commissioned a third party to conduct a thorough review of the incident and make recommendations on how we can strengthen our existing controls. That review is ongoing but we are committed to quickly implementing its recommendations,” OpenSea said in a 16 September statement.

OpenSea has more than 20 million listings for NFTs on its platform, with some artworks being sold via the cryptocurrency ether in transactions worth tens of millions of dollars. It is backed by investors including Silicon Valley stalwart Andreessen Horowitz, after it raised $100m in funding earlier this year.

Coinbase set to enter crypto futures

Crypto exchange Coinbase filed an application to be approved as a futures provider in the US, as it seeks to join the crowded digital assets derivatives market.

Coinbase said it had applied for membership with the National Futures Association, a top self-regulatory body in the US, as a futures commission merchant on 15 September.

The move would mark Coinbase’s first entry into crypto derivatives, a lucrative space for exchanges. Many of Coinbase’s rivals already offer access to derivatives, including Kraken, Binance and CME Group.

READ Coinbase applies to join crypto futures market

“This is the next step to broaden our offerings and offer futures and derivatives trading on our platforms,” said Coinbase in a tweet. “Goal: Further grow the cryptoeconomy.”

Crypto futures are also popular among traditional financial institutions, which are subject to strict regulations which prohibit them from physically holding digital assets such as bitcoin.

Goldman Sachs and Citigroup are among the largest firms offering futures products in bitcoin and ether while others are building partnerships with crypto exchanges to gain access.

Walmart falls prey to crypto hoax

Crypto traders, journalists and even the social media team of cryptocurrency litecoin’s top parental organisation were fooled by a hoax this week that tied the digital currency to a partnership with retail giant Walmart.

A fake news release — published on GlobeNewswire on 13 September with a link to a false Walmart corporate website that had been created only a month earlier — claimed the supermarket was to begin accepting litecoin for payment.

The news, reported by Reuters and other outlets, prompted the price of litecoin to jump more than 30%. Litecoin’s official Twitter account mistakenly retweeted the announcement, lending it credibility before Walmart later said it had not made any such deal.

READ Cryptocurrencies settle after Walmart hoax

Litecoin’s founder Charlie Lee said its social media team had believed the announcement to be true after it was reported by Reuters, adding that the network does not require an official partnership to be made for a merchant to begin accepting the token as payment.

“As the Litecoin Foundation, there’s not much we can do,” Lee said in an interview with Bloomberg TV. “People can release fake news on cryptocurrencies all the time, this happens with the traditional stock market also.”

The cryptocurrency later gave up most of its gains after Walmart denied the report. Both Walmart and GlobeNewswire said they have started an investigation into the matter.

Goldman’s dogecoin millionaire

A Goldman Sachs managing director who reportedly quit his job at the bank after making millions by investing in dogecoin has reappeared in a new role, landing at a healthcare startup in Manchester.

Aziz McMahon, who was head of emerging markets sales at Goldman in London, will be appointed as executive chairman of SpectrumX, the firm said in a 15 September statement.

McMahon left Goldman Sachs in May, reportedly banking millions from trading dogecoin, the cryptocurrency originally started as a joke which surged in value earlier this year after being championed by billionaire Tesla chief executive Elon Musk.

READ Goldman Sachs’ dogecoin millionaire re-emerges at UK healthcare company

His windfall and subsequent departure from the US banking giant was originally reported by eFinancialCareers, and followed by numerous other publications. McMahon’s crypto gains could not be verified by Financial News.

McMahon spent 14 years at Goldman Sachs before stepping down. The announcement of his appointment said his interests included “early stage biotech, environmental regeneration and digital assets”.

To contact the author of this story with feedback or news, email Emily Nicolle

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