Yesterday morning, Forbes published an article claiming Binance transferred $1.8 billion of collateral meant to back its customers’ stablecoin to hedge funds, including Alameda and Cumberland/DRW, without customer consent. Forbes mentioned that the transaction occurred between August 17 to December 2022.
CZ criticized the article, stating that it contained negative spins, misconstrued facts, and accusatory questions. He emphasized that Forbes needed to understand how an exchange worked and that users could withdraw their assets from the platform. CZ further explained that the $1.8 billion transaction Forbes referred to was an old transaction that Binance’s clients had completed, not a recent event.
The article also compared FTX, Sam Bankman-Fried’s bankrupt exchange, with Binance. However, CZ clarified that Binance and FTX were not the same, and his exchange had stood the test of time, allowing users to withdraw billions of dollars from the platform without halting withdrawals.
CZ highlighted the new Proof-of-Reserves approach implemented by Binance to promote transparency and protect customers’ security and privacy. He stated that the system would ensure that Binance always holds users’ funds in a 1:1 ratio to its collateral. CZ’s followers supported Binance and dismissed the uncertainty brought about by the article.
Binance is the largest cryptocurrency exchange in terms of trading volume. Established in 2017, it has grown to become one of the most popular exchanges used by crypto users, operating in several countries worldwide, including Europe.
Binance faced regulatory concerns in the United States in 2019 and was subsequently banned. However, to comply with the country’s laws and regulations, the company established a new exchange named Binance.US.
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