Original Author: Xiao Sa Zhang Changdan
Original source: Xiao Sa lawyer
Obviously, this fairy fight has made Bitcoin players all over the world go through a psychological test.Attempt to save the market will lead to the accelerated decline of FTX, which will undoubtedly aggravate the already tense nerves in the encryption circle.Will there be a larger collapse in the future, and what forces will support the continued strength of encrypted assets?first level title
1. Why did Changpeng Zhao abandon the acquisition?
It is true that Mr. Zhao Changpeng does have both business vision and business skills in the international encrypted asset industry.So, is the abandonment of the acquisition this time really as it stated to the media? Im afraid its not that simple.
undeniable,FTX has serious legal problems of its own, moral hazard is prominent, financial accounts are chaotic, audit results are not credible, and there are even rumors that there may be criminal issues such as transferring client assets. FTXs own compliance situation is indeed difficult to save. It involves the territoriality principle of more than three countries and the jurisdictional issue of global customer recourse. If you want to deal with it completely legally, it is comparable to Shudao.
At the same time, from a commercial point of view, it is not surprising that by exposing the compliance problems of the target company, it will cause a chain reaction, and finally lower the price.The strange thing is that in the encrypted world, the anti-fragility itself is extremely poor. These giants in the encrypted world are essentially tied to the same boat together. If one party damages the port side, the entire ship will sink.The logic is not difficult to understand, that is, although encrypted assets are regarded as safe-haven assets, the proportion of customers who come with hype is extremely high.It is very easy to form a stampede incident, and the ecology is fragile, and it is easy to be stigmatized.
In fact, there is another important factor that we have to mention, that is: anti-monopoly investigation.
In the United States, some people in the industry believe that this acquisition is a hostile acquisition, butWithout real hammer, we cant judge like this.But for monopoly issues, there are real legal risks. The implementation of monopolistic behavior should be declared according to the law, but failure to declare may trigger anti-monopoly investigations, and the types of monopolistic behavior mainly include monopoly agreements, abuse of market dominance, concentration of operators, abuse of administrative power to exclude or restrict competition, etc., which are most directly related to Binance’s acquisition of FTX What is relevant is the concentration of operators. Whether there may be other types of monopoly behavior needs to be judged according to the specific circumstances of the acquisition.
Both Binance and FTX are cryptocurrency exchanges, and Binance’s spot trading market share exceeds 50%. This acquisition of control rights is a typical horizontal acquisition. Therefore, the direct impact of the acquisition is to expand Binance’s market share and reduce competition. , market dominance is more obvious,There is a high probability that it will be identified as a concentration of undertakings, which needs to be declared in accordance with the Monopoly Law. Failure to declare in accordance with the law will trigger an anti-monopoly investigation.
Different jurisdictions have different administrative penalties and penalties for violations of anti-monopoly laws. While encrypted digital currency trading is a global market, Binance and FTX also serve global customers, so,If Binance really acquires FTX this time, it may trigger anti-monopoly reviews in many countries or regions.first level title
2. Cryptocurrency exchange MA also follows the routine of international mergers and acquisitions
For global fans of crypto beliefs, it seems that everyone initiallyThe ideal is to have a more transparent and fair economic ecology and financial system,However, the exchanges that provide liquidity to everyone are still operated by physical companies, regardless of whether they are registered in Malta, the United States, or Singapore and HK.
After reviewing the information, it was found that FTX was registered in Antigua and Barbuda, and then its headquarters was transferred to the Bahamas, with its main camp in the United States. Binance is headquartered in Malta.Since the two companies have their main business in the United States, they fall under the jurisdiction of the US SEC investigation.
Assuming that Changpeng Zhao’s acquisition has not been abandoned, or restarted after the US SEC’s investigation, then the operation plan is basically as follows (we specially consulted Dr. Zhang Changdan of our team, Dr. Zhang is familiar with international MA business, and she introduced the company’s acquisition process including the following links):
The first step is preliminary consultation.The parties to the transaction reached a preliminary intention and signed an agreement of intent on the acquisition. This is what Changpeng Zhao disclosed in the news, and he reached a non-binding letter of intent with Sam. In some company acquisition projects, the seller may require the acquirer to pay a certain earnest money to confirm that the acquirer has the sincerity of the acquisition; if it involves an acquisition project that must be disclosed according to law or subject to pre-examination by the regulatory agency, the parties need to sign a letter of intent Phase disclosure and approval of the agreement;
The second step is due diligence.The acquirer conducts business, financial and legal investigations on the target to be acquired, and evaluates the asset value and acquisition risks of the target to be acquired; Internal decision-making (such as shareholder (meeting) meeting, board of directors decision-making), external approval procedures; please note that many countries have strict restrictions on the acquisition of companies operating or registered in their own countries. Lets take the old western country - the United Kingdom as an example If you want to acquire a British company, according to the British National Security Law and Investment Act, the British Secretary of State has the power to block or restrict transactions that design national security issues; if it involves unfair competition, the British Competition and Markets Authority also A special card needs to be set up, and another round of review is required; if the target company is a financial institution, another approval is required by the UK Financial Conduct Authority or the Prudential Bureau. In other words, readers should not think that the laws of countries with Anglo-American law system will allow subjects to buy and sell company equity at will. No country is outside the law. There are laws, regulations and rules, and even traditions must be followed.
The third step is negotiation.According to the results of investigation, evaluation, decision-making and approval, conduct consultations and negotiations on the acquisition method, acquisition conditions and transaction documents;
The fourth step is to sign the acquisition contract and revise the articles of association.Acquisition contracts usually stipulate conditions for entry into force, and common entry into force conditions include the completion of the internal decision-making and external approval procedures required by all parties to complete the acquisition;
The fifth step is delivery.The above steps can be combined or further subdivided. The first four steps may be started successively or at the same time, which need to be handled flexibly according to the specific circumstances of the acquisition project.
The above steps can be combined or further subdivided. The first four steps may be started successively or at the same time, which need to be handled flexibly according to the specific circumstances of the acquisition project.Acquisition cycle length varies by project.If the transaction method is simple and the situation of the acquisition target is clear, the delivery may be completed in one or two months; but if the transaction model is complex, the acquisition target is large-scale or the situation is complex, and the decision-making and approval procedures to be performed are complicated, etc., the entire acquisition cycle It may take several years.
FTX is a cryptocurrency trading platform, and its liquidity crisis is closely related to its issued tokens, its own asset-liability structure, and external factors such as the token market environment. The long acquisition cycle may affect it in many ways. Whether it will affect its liquidity needs to be considered comprehensively in combination with internal conditions, external environment and other factors. But overall,first level title
3. Fraud and Jurisdiction
Whether the acquired party is suspected of fraud or fraud also needs to be clarified. One thing I would like to remind everyone is the distinction between simple civil fraud and criminal fraud.If the other party of the transaction knows the real situation, he will not implement the disposition of the property, but fabricates this fact. Such behavior is a fraud that violates the criminal law.
Although in recent years some scholars have emphasized that the principle of modesty in the criminal law should be brought into play, and on the issue of the distinction between civil fraud and criminal fraud, they have narrowed the scope of criminal fraud and put forward the theory of losing the possibility of civil remedies. However, after all, there is a certain gap between judicial practice and the debate in criminal law academic circles. In fact, as far as the judgment point of judicial practice is concerned,In the case of a donation running away event on the currency trading platform, there is a high probability that its executives will be identified as fraudulent.
Sister Sa still wants to remind the jurisdiction of my country’s criminal law—this is especially important for overseas Chinese. The jurisdiction of criminal law in my country has the principles of territorialism, personalism and protectionism, among which personalism is stipulated in the criminal law of our country Article VII. Paragraph 1 of Article 7 stipulates, This Law shall apply to citizens of the Peoples Republic of China who commit crimes stipulated in this Law outside the territory of the Peoples Republic of China. pursue. This meansEven if it is not outside the territory of our country, as long as it still has the citizenship of our country, it will be regulated by the criminal law of our country.
Moreover, judging from the current transaction volume and transaction situation in the currency circle, once a case is involved, the determination of the amount is often a huge amount or a particularly huge amount, and the huge amount of the crime of fraud stipulated in our countrys criminal law can already constitute a criminal case. More than three years of fixed-term imprisonment is the sentencing stall,write at the end
write at the end
Sister Sa was recently studying documents related to encrypted assets by the Financial Stability Board, an international organization, and found that the G20’s vigilance on encrypted currencies and encrypted assets has always existed.
In the future, as the acceptance and attitude of various countries towards encrypted assets change, some countries and regions may begin to drive out the encrypted asset industry; some countries and regions may begin to welcome and tolerate the encrypted asset industry. Whether it is Po County, which sells friendly policies, or Malaysia, which wins with the cost of living, or HK, which is gradually recovering, it is understandable that the crypto asset industry is looking for legal and policy depressions around the world.Original link
