According to a Forbes report, Binance entangled consumer assets and moved them to many hedge firms.
Forbes has accused Binance of engaging in a “backroom move” by transferring $1.78 billion in stablecoin to hedge funds, saying the exchange engaged in a “backroom strategy.”
Forbes reexamined Binance’s on-chain activity and determined that the exchange moved $1.78 billion in customer assets to several hedge firms. The report discloses that the exchange operated by Changpeng Zhao totally exhausted its collateral for B-peg USDC without decreasing its supply.
The community accuses Forbes of promoting FUD against Binance. The B-token is issued by Binance to support the use of other blockchain tokens on the BNB chain. The exchange is only permitted to issue B-tokens after keeping 100 percent of the initial token as collateral. For example, each 100 B-USDC must be collateralized with 100 USDC.
The remaining $1.78 billion was sent to a Binance 14 cold wallet, while $1.85 billion was restored to the peg wallet. Eventually, the exchange paid the proceeds to a trading business, Cumberland, Amber Group, Alameda Research, and Justin Sun, the inventor of TRON.
A spokesman for Binance stated in January that the peg funds were transferred to cold wallets in error.
The withdrawal of $1.78 billion USDC by Binance on August 17 had no effect on the B-USDC supply. The exchange did not fix the collateral’s fall to zero for four months.
Moreover, the article states that B-USDC was short by more than $1 billion on three separate occasions. Forbes claims that Binance is misusing user cash, much to the collapsed exchange FTX.
In several instances, the community has pointed out that the publication favours Sam Bankman-Fried while spreading FUD about Changpeng Zhao. Irina Heaver, a crypto lawyer, stated that Forbes is publishing “lies and misinformation.” Moreover, Zhao sued Forbes for defamation before dropping the suit in 2020.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.