Two journalists wrote a long article for business magazine Forbes, in which they compared the course of events at Binance to the demise of crypto exchange FTX. According to Binance’s CEO, this is nothing more than FUD and the allegations are baseless.
Is Binance cheating with $1.8 billion?
The Forbes article came online yesterday stating that international cryptocurrency exchange Binance had moved $1.8 billion worth of stablecoin USDC to various hedge funds. Of that huge sum, $1.1 billion was transferred to Cumberland, the cryptocurrency trading arm of Don Wilson’s DRW.
This is an American trading company that, according to the article, may have helped Binance in its efforts to convert USDC into its own stablecoin, Binance USD.
Forbes writes that Binance labeled the assets as “Understanding Usage” and did so without informing its customers. This is the conclusion reached by authors Javier Paz and Steven Ehrlich when they examined the blockchain from August to early December.
They write that the timing is impressive because it was around the time that FTX collapsed, leaving many other companies on the brink of collapse. Therefore, the $1.8 billion in collateral is USDC circulating on the Binance blockchain.
From trouser pocket to vest pocket
Binance responds: “Transactions identified in the chain are related to internal portfolio management. While Binance has previously acknowledged that the wallet management processes for securing tokens linked to Binance have not always been smooth sailing, at no time has the security of user assets been compromised. Processes for managing our collateral have been established over a long period of time and are traceable on the blockchain.”
Basically, Binance has been transferring funds from pocket to pocket. Patrick Hillman, head of long-term strategy at Binance, has a straight leg:
“Forbes doesn’t seem to understand how a cryptocurrency exchange works.”
He says the two journalists misinterpreted the client’s data as “millions of collateral movements”. Changpeng Zhao (CZ) also noted that the Binance board says that Forbes only monitored withdrawals, but completely ignored deposits.
Difference between Binance and FTX
The Forbes article also makes the comparison between FTX and Binance. While these two exchanges are connected, they are not connected in the way Forbes describes.
Shortly before the internal problems of FTX became known, Binance announced that it wanted to sell its FTT, FTT is the official crypto exchange FTX. Binance had access to the books and did not trust the stuff. When CZ announced it would liquidate all of its FTT, the share price plummeted and a “war” began between the two exchanges.
In the end, FTX crashed (despite rumors that Binance would take over its struggling competitor) and cryptocurrency prices plummeted. There was a lot of fear in the market and investors massively exchanged their cryptocurrencies for dollars and euros.
At the time, Binance saw an unprecedented outflow, processing $6.6 billion in withdrawals in seven days at the height of the FUD.
Chinese ethnicity quotes
CZ further emphasized that his Chinese nationality was mentioned again in the article and that Binance is the most frequently referred to as a Chinese company by various mainstream media outlets. He says he has made it public on several occasions that he is a Canadian citizen.
He says:
“I am deeply disappointed that Forbes continues to write unsubstantiated articles and thereby lose its own credibility.”
Perhaps there is another reason for your disappointment. Binance invested no less than $ 200 million in the American business magazine in February 2022.
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Source: Btc Direct
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Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
