Customers drained billions of dollars from Binance's crypto platform last week — just one reason the spotlight is on the company in the wake of the FTX implosion.
Spooked investors are on the alert for signs of trouble after the collapse of now-bankrupt FTX, the once-$32 billion crypto empire founded by Sam Bankman-Fried. Some are worried that cracks may be starting to appear at Binance.
Here are 5 things to know about what's happening at Binance, and why it's got the crypto community wondering.
1.People are worried about Binance's holdings of customers' funds
After FTX's bankruptcy showed its coffers were bare, crypto firms came under pressure to show their customers' holdings were safe and they could pay up if there was a rush of withdrawals.
On top of that, Reuters reported that FTX's Bankman-Fried quietly transferred at least $4 billion in user funds to sister trading firm Alameda Research after it suffered losses.
Binance sought to boost confidence in its own business by getting a "proof of reserves" report. It enlisted accounting firm Mazars to verify its holdings, to maybe reassure customers their funds are still in their accounts and not loaned out.
But legal experts and others said the platform's users shouldn't be satisfied with the Mazars report, as it didn't dig into how good the financial controls were. Even though it suggested Binance's situation was solid, it also showed bitcoin liabilities were $245 million bigger than assets, an the WSJ reported.
เกมคาสิโนสดไฮโล
Nearly half of the company's $75 billion reserves are in its own stablecoin BUSD and its native token binance coin (BNB), according to Bloomberg.
On Friday, the accounting firm suspended its proof-of-reserves work with Binance and other crypto clients "due to concerns regarding the way these reports are understood by the public," the FT reported.
2. Customers pulled a net $3 billion in funds in the space of a day
Binance has seen heavy withdrawals in recent days as questions about its reserves and a DOJ investigation built. Meanwhile, the arrest of FTX founder Bankman-Fried eroded trust in crypto further.
On Tuesday, Binance logged its highest daily withdrawals since June, with net outflows of $3 billion over just 24 hours, according to Nansen data. The exchange was forced to temporarily freeze withdrawals of USD Coin while it boosted its holdings of the stablecoin.
Just over a month ago, the crypto giant held $69.5 billion in digital assets in publicly disclosed wallets, according to Nansen. That total's now $54.7 billion due to large withdrawals and price fluctuation, it said.
3. There's a DOJ investigation into Binance focused on money laundering
Adding fuel to the fire were reports the US Justice Department has been investigating Binance over the company's compliance with financial crime rules.
Prosecutors are considering whether to file criminal charges against its founder Changpeng Zhao and other executives, according to Reuters. These would cover money laundering conspiracy, unlicensed money transmission, and criminal sanctions violations.
แทงไฮโลคาสิโนสด
Reuters calculated that Binance processed over $10 billion in illegal payments in 2022 and said it tried to evade regulators, which the crypto giant disputed.
4. Binance CEO "CZ" isn't fazed and says it's business as usual
Zhao, commonly known as "CZ", has doubled down on trying to ease customers' worries about Binance's liquidity. He's pushed back against what he sees as "FUD" — the spread of baseless fear, uncertainty and doubt.
"People can withdraw 100% of the assets they have on Binance. We will not have an issue at any given day," he told CNBC on Thursday. "Crypto businesses have to hold user assets one-to-one, and that's what we do."
สมัครสมาชิกเล่นไฮโลออนไลน์
Earlier in the week, Zhao shrugged off the heavy outflows from the exchange as "business as usual". And after Binance lifted its freeze on USDC withdrawals, he welcomed the welcomed the events as a credibility-building "stress test" of the exchange's resilience.
5.But he warned Binance staff there's a "bumpy" road ahead
While Zhao played down concerns, issues remain. The young billionaire told staff that FTX's problems have put "a lot of extra scrutiny and tough questions" on Binance, which need to weather a confidence crisis.
"While we expect the next several months to be bumpy, we will get past this challenging period — and we'll be stronger for having been through it," he said in a memo viewed by Bloomberg.
I also wrote an article on a similar subject will find it at write what you think. Kissimmee Bed Bug Treatment
For many people this is the best solution here see how to do it. Orlando Termite Treatment
I am always searching online for storys that can accommodate me. There is obviously a multiple to understand about this. I feel you made few salubrious points in Attributes moreover. Detain busy, awesome career! Oviedo Termite Treatment
I can recommend primarily decent and even responsible tips, as a result view it: Deltona Pest Control
Pretty nice post. I just stumbled upon your weblog and wanted to say that I have really enjoyed browsing your blog posts. After all I’ll be subscribing to your feed and I hope you write again soon! cash for gold scottsdale
Thanks for taking the time to discuss this, I feel strongly about it and love learning more on this topic. If possible, as you gain expertise, would you mind updating your blog with extra information? It is extremely helpful for me. pawn shops in tempe az
Wow, this is fascinating reading. I am glad I found this and got to read it. Great job on this content. I liked it a lot. Thanks for the great and unique info. ویزای توریستی کامبوج
