Binance CEO Responds to Forbes Article on Fund Shuffling
Rebeca Moen Mar 04, 2023 09:41
Binance CEO Changpeng Zhao responded to a Forbes article that focused on the movement of funds by the cryptocurrency exchange. The article drew parallels between Binance and the now-defunct FTX and discussed the failed Voyager bid by Binance.US, as well as the United States Securities and Exchange Commission’s planned legal action against Paxos Trust Company, the issuer of the Binance-branded stablecoin, Binance USD (BUSD). Binance transferred $1.8 billion in stablecoin collateral to hedge funds such as Tron, Amber Group and Alameda Research between August and December 2022. Binance says it still supports BUSD and is now looking into non-USD stablecoins.
Binance, one of the world's largest cryptocurrency exchanges, has been in the news recently following a Forbes article that raised concerns about the movement of funds by the exchange. The article highlighted the transfer of $1.8 billion in stablecoin collateral by Binance to hedge funds such as Tron, Amber Group, and Alameda Research between August and December 2022. The article also drew parallels between Binance and the now-defunct FTX, which collapsed due to financial mismanagement.
In response to the article, Binance CEO Changpeng Zhao took to Twitter to refute the allegations made by Forbes. He called the article "FUD" and said that the authors did not understand how an exchange works. He emphasized that Binance's users are free to withdraw their assets at any time they want.
The Forbes article also discussed the failed Voyager bid by Binance.US and the planned legal action by the United States Securities and Exchange Commission against Paxos Trust Company, the issuer of the Binance-branded stablecoin, Binance USD (BUSD). Binance had announced in February 2022 that it would take a $200 million stake in Forbes, but the deal fell through after Forbes' plan to go public did not materialize.
The New York Department of Financial Services (NYDFS) also ordered Paxos Trust Company to terminate its issuance of BUSD. In response, Binance announced that it would no longer mint BUSD but would support the stablecoin until its redemption period ends in February 2024. The exchange is now looking into non-USD stablecoins.
Binance has faced regulatory scrutiny in several countries, including the United States, Japan, and the United Kingdom. The exchange has been accused of not complying with anti-money laundering and know-your-customer regulations. Binance has denied the allegations and said that it takes compliance seriously. The exchange has also announced plans to set up a regional headquarters in Malta to comply with European Union regulations.
Despite the regulatory challenges, Binance remains one of the largest cryptocurrency exchanges in the world. The exchange has a wide range of products and services, including spot trading, derivatives trading, and a decentralized exchange. Binance also has its own blockchain, Binance Smart Chain, which has become popular among developers for building decentralized applications (dapps).
In conclusion, the Forbes article has raised concerns about the movement of funds by Binance and its compliance with regulatory requirements. Binance CEO Changpeng Zhao has refuted the allegations and emphasized that the exchange takes compliance seriously. Binance has faced regulatory challenges in several countries but remains one of the largest and most innovative cryptocurrency exchanges in the world.
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