In a new piece published yesterday, Forbes criticized Binance, the biggest cryptocurrency exchange in the world, for suspected mismanagement of client cash. Today, CEO Changpeng Zhao, often known as “CZ,” fiercely refuted these charges and accused the news site of intentionally spreading incorrect information.
According to a story published by Forbes on Monday, Binance purportedly sent $1.8 billion in collateral to hedge funds such as Alameda and Cumberland/DRW in order to back its clients’ stablecoins. The issue is not Binance pegged USD (BUSD), but rather B-peg USDC.
According to the blockchain data examined between August 17 and early December, the B-peg stablecoin is not backed by any collateral, despite the exchange’s claims to the contrary. So, customer payments intended to support USDC digital copies might have been used to finance other transactions comparable to FTX.
Today, CZ replied to this charge by calling Forbes’s credibility into doubt. “I am once again unwillingly devoting time to FUD (4). Forbes published another FUD piece with several accusatory questions, negative twists, and purposeful misinterpretation of the facts. They referenced some of our customers’ older blockchain transactions.
CZ said that Forbes’ use of Tron, Amber Group, Alameda Research, etc. demonstrates a fundamental misunderstanding of how an exchange operates. Our users are permitted to withdraw their funds at any moment. Their withdrawals are converted into hundreds of millions of collateral shifts.”
As the CEO explains further, the report disregards the fact that consumers must first deposit funds with Binance before making uninvestigated withdrawals. Furthermore, CZ says:
“This page makes a concerted effort, even down to the headline, to group Binance and FTX together. We are unique. Binance has passed the test of time, as users withdrew billions of dollars in December without incident.”
Also, Binance’s CEO stressed the exchange’s usage of a proof-of-reserves with a novel Zero Knowledge (ZK) technique, as advocated by Ethereum co-founder Vitalik Buterin, to safeguard customer data. “Binance retains user funds, 1:1, at all times,” CZ added as he concluded his verbal attack: “I am really disturbed that Forbes continues to publish bogus info, so losing its own reputation.
The Forbes post follows yesterday’s announcement by the biggest U.S. cryptocurrency exchange, Coinbase, that it would halt trading the stablecoin BUSD.
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.