In an article published yesterday, Forbes once again attacked the world’s largest digital currency exchange Binance for alleged wrongdoing in the handling of customer funds. CEO Changpeng Zhao, better known as “CZ,” vehemently denied the claims today, accusing the news outlet of deliberate misrepresentation.
These Are Allegations Against Binance
Forbes reported in an article published Monday that Binance transferred $1.8 billion as collateral to hedge funds such as Alameda and Cumberland/DRW last year, which were intended to support their customers’ stablecoins. The problem does not revolve around Binance pegged USD (BUSD), but B-peg USDC.
An investigation of blockchain data from August 17 to early December concluded that there was no guarantee for the B-peg stablecoin, even though the exchange was fully supported. Customer funds to support USDC digital replicas can be used to fund other trades, similar to FTX.
CZ the answer for this accusation today, question the integrity of Forbes.
I am reluctant to spend time on FUD anymore (4). Forbes wrote another FUD article with many accusing questions, with a negative spin, of deliberately misrepresenting the facts. He mentions some old blockchain transactions that his clients have done.
CZ discussed that Forbes named Tron, Amber Group, Alameda Research, etc. “Our users are free to withdraw their assets whenever they want. These withdrawals are converted into collateral that moves hundreds of millions.
As the CEO further explained, the article ignores the fact that users must first deposit funds with Binance to make withdrawals that have not been investigated. In addition, CZ states:
The article attempts to group Binance and FTX together, including the choice of article title. We are different. Binance has stood the test of time, with users safely withdrawing billions of dollars in December.
In addition, the CEO of Binance confirmed that the exchange has implemented proof-of-reserve with the new Zero Knowledge (ZK) approach, proposed by Ethereum founder Vitalik Buterin, which protects the security and privacy of users. “Binance holds user funds, 1:1, of course,” CZ continued, closing his speech:
I am very disappointed that Forbes continues to write baseless articles, losing its own credibility.
The Forbes article comes after the largest US crypto exchange Coinbase announced yesterday that it will stop trading the stablecoin BUSD. The stablecoin issued by Paxos was canceled after the Securities and Exchange Commission (SEC) issued a Wells Notice to the issuer, and can be redeemed until February 2024.
At press time, BNB was trading at $301.68, still holding its 200-day Exponential Moving Average (EMA).
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