The world’s largest crypto exchange, Binance, has been dealing with a torrent of FUD (fear, uncertainty, and doubt) since the downfall of FTX. The firm is now fighting back with its latest blog post.
The first of which was the temporary suspension of USDC withdrawals earlier this month. It explained that this was done during a “token swap” conversion period, with the exchange consolidating its stablecoin reserves into BUSD.
The next thing it addressed was the availability of sufficient reserves for withdrawals. It confirmed that “all users’ assets in Binance are supported 1:1,” and that its financial status was very healthy since it makes ample profit on transaction fees. On Dec. 16, CryptoQuant verified Binance's reserves, reporting that there was no “FTX-like” behavior.
“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.”
Regarding Mazars and the “Big Four” auditing firms refusing to work with crypto companies, it said that encrypted on-chain verification was a new field that these companies may not have the capacity to carry out.
It noted that these audits are typically aimed at the financial situation of the listed company, not verifying reserve assets.
Mazars has since removed Binance's audit reports from its website. Binance also stated that it did not need to disclose financial information because it was a private company, not a listed one.
“In many jurisdictions where we operate, we have shared or are sharing operational and financial information as required by local regulators.”
Regarding a Reuters report claiming that the U.S. Department of Justice was investigating the company, Binance stated that mainstream media has been targeting the company with salacious reporting for quite a while now. It added that it had the most compliance licenses in the world and spent the most fighting crypto crime.
Finally, the blog post reiterated CEO Changpeng Zhao’s comments that Binance did not destroy FTX; FTX did that itself. Binance does not regard other exchanges as competitors, it said, adding tha“we are more focused on continuously promoting and expanding industry adoption.”
So there you have it. The FUD has been refuted but that hasn’t prevented an exodus from the exchange in recent weeks as investors moved to self-custody their crypto assets.