Rumors, FUD, real problems: it’s been hard to figure out what’s really going on at the Binance exchange these days. Beyond the media storm, is there really cause for concern? We take stock of the subject.
Binance: What’s happening on the biggest exchange?
Since the fall of the giant FTX, mistrust reigns when it comes to exchanges. And Binance, the world’s largest exchange, is not immune. The platform have actually seen some doubt raised regarding his reserve credentialsespecially when the company that performed its audit ceased to offer its services.
As a reminder, Binance has multiplied initiatives to prove its financial stability : The platform had published the addresses of his wallets in a public way, had fed his emergency fund, created a joint fund with other companies and conducted an audit to prove that it actually had bitcoins (BTC) from his customers.
But that doesn’t seem to be enough. Several elements have again revived distrust of society. First with an interview with Changpeng Zhao, who seemed visibly uncomfortable with a reporter’s question. The video clip, shared widely on Twitter, shows a Binance CEO hesitating when asked if he could squeeze $2 billion out of his platform.
But as several commentators have pointed out, Changpeng Zhao didn’t talk about user withdrawalsbut an amount paid by FTX to Binance that could potentially be donated:
This @cz_binance the clip goes viral but lacks context.
Question: Could Binance Handle Someone Asking For $2.1 Billion Back?
CZ avoids answering directly: “We are financially strong”
This wasn’t about customer deposits, it was about $2.1B FTX paid them.pic.twitter.com/fcpWX5BXvm
—Luke Martin (@VentureCoinist) 15 December 2022
“FUD” about a possible $2 billion withdrawal is therefore based on a partially truncated context. Especially since Binance made $3.6 billion in withdrawals last week, seemingly without any particular problem.
👉 More info about the Binance exchange
The best way to secure your cryptocurrencies 🔒
🔥 The world leader in crypto security
Binance’s accounting firm ceases services, CryptoQuant comes to the rescue
But the controversy flared up again this weekend when we learned that Mazars, the company conducting the audits of Binance, had deleted the page about the company on its site…and stopped providing services to crypto companies. A point considered concerning by the community, which shows the difficulty for crypto companies to show their credentials. At least that’s what Changpeng Zhao claimed – wrongly or not – who explained that big audit firms are not suitable for crypto companies.
Meanwhile, research firm CryptoQuant arrived and claimed that Binance’s reserves were compatible, managed in the usual way and did not compare to FTX’s. She also pointed out that the platform was not overexposed to its own token, unlike FTX: its reserves in BNB correspond to approx. 10% of total reserves.
👉 Listen to this article and all other crypto news on Spotify
So what to take away from all this? There are definitely a few areas of concern to be aware of, but that doesn’t necessarily mean Binance is in danger. Thus, we can cite the somewhat evasive answers of Binance, the unexpected departure of Mazar, as well as the fact that the company does not yet have a complete audit.
On the other hand, it should be noted that the addresses of Binance have already been available for consultation for a few weeks, and from the beginning seemed to correspond to the statements of the company. A point that was also reminded by CryptoQuant, that highlighted the apparent health of Binance. The efforts of the largest exchange platform to show its credentials are also obvious, and the composition of several reserves goes in this direction.
We will therefore leave it to everyone to draw conclusions, and we will remember that periods of strong emotion are not necessarily those that allow us to have the clearest vision of unity. The use of “cold” portfolios also makes it possible to limit the risks: something to keep in mind in these times of uncertainty.
👉 Find our file on the FTX case
Advance the world of cryptocurrencies with Cryptoast experts 📘
Photo: WebSummit via Flickr (CC BY 2.0)
Receive a roundup of crypto news every Monday via email 👌
What you need to know about affiliate links. This page presents assets, products or services related to investments. Some links in this article are affiliate. This means that if you buy a product or register on a website from this article, our partner pays us a commission. This allows us to continue to offer you original and useful content. There is no impact on you and you can even get a bonus by using our links.
Investing in cryptocurrencies is risky. Cryptoast is not responsible for the quality of the products or services presented on this page and cannot be held responsible, directly or indirectly, for any damages or losses caused after the use of any product or service highlighted in this article. Investments related to crypto-assets are risky by nature, readers should do their own research before taking any action and only invest within the limits of their financial means. This article does not constitute investment advice.
AMF recommendations. High returns are not guaranteed, a product with high return potential entails high risk. This risk-taking must be in line with your project, your investment horizon and your possibility of losing part of this savings. Do not invest if you are not prepared to lose all or part of your capital.
To continue, please read our financial situation, media transparency and legal notices pages.