Since the FTX crash, Binance, a leading global cryptocurrency exchange, has had to deal with fear, uncertainty, and doubt (FUD). In response to the FUD, Binance released a blog post in Chinese on December 22 that addressed seven key points.
One of these topics addressed was the temporary suspension of USDC withdrawals earlier this month. The blog post explained that during the token swap conversion period, the exchange had converted its stablecoin holdings into BUSD.
Binance stated:
“USDC does not exist on the Binance platform And other stable currency trading pairs, and users can withdraw assets denominated in BUSD at a ratio of 1:1 to USDC, USDP and TUSD at any time.”
Binance addressed the concern about having sufficient reserves to cover withdrawals by emphasizing that all user assets are supported 1:1 on the platform and that users have the option to withdraw their tokens at any time. The company also noted net withdrawals of $6 billion as evidence of stability, saying, “we have passed the test.”
Binance generates most of its revenue from transaction fees. The assets managed by the company are separate from those managed by users, which means that Binance is financially stable. The organization also asserted that it has “enough capital reserves to fund daily operations.”
Binance stated:
“Binance will not embezzle users’ funds for any transactions or investments, nor does it have any debts, nor is it on the list of creditors of any company that has recently gone bankrupt. A few negative cases do not represent the entire industry.”
Binance’s audit reports have been taken down from Mazars’ website, sparking concerns that Mazars and other large accounting firms are refusing to work with Binance. Binance argued that since Mazars is a private firm, it is not subject to disclosure requirements related to financial information.
Binance stated:
“what needs to be explained and clarified is that the audit is aimed at the financial status of the listed company, not the centralized exchange chain. The verification of the overall reserve assets on the chain is fundamentally different from the verification of assets on the chain that Binance is calling for.”
Binance stated that the verification process for BTC is only the first step and has provided an explanation for why only BTC verification is currently available. The company plans to use BTC as a starting point to quickly complete the on-chain verification of several major currencies, allowing users to query independently.
Binance emphasized that they approach all work involving user assets with caution, especially when handling multiple currencies and large volumes, which requires collaboration with various teams, including technology, finance, security, and risk management.
As a private company, Binance explained that it is not required to disclose its detailed financial status to investors due to its financial stability and self-sufficiency, as well as the fact that it has no plans to go public and does not require external financing or investors.
The company also mentioned that it had been the target of sensationalized reporting from mainstream media in response to a Reuters report alleging that the US Department of Justice was investigating the company.
Binance asserted that it has spent the most money combating cryptocurrency crime and holds the most compliance licenses globally.
Binance stated:
“We have assembled a world-class security and compliance team comprised of experts from top investigative organizations and law enforcement agencies, which has grown by more than 500% this year alone.”
Finally, Binance highlighted CEO Changpeng Zhao’s remarks that FTX, not Binance, was responsible for its own collapse.
Binance added:
“Binance will not regard other exchanges as competitors. The current industry touches less than 6% of the population. We are more focused on continuously promoting and expanding industry adoption.”
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