Binance CEO, Changpeng Zhao has expressed disappointment at a recent publication by Forbes, questioning the cryptocurrency exchange’s business practices. The CEO faulted how the article tried to place Binance and bankruptcy-ridden FTX in the same bracket. CZ via his official Twitter handle regarded the publication as “baseless” stating that Forbes is losing credibility for publishing such story.
In their article, Forbes established that Binance moved about $1.8 billion of users’ assets into other business endevours. In the report, Forbes said the funds were meant to back users’ stablecoins deposit. Forbes stated that without their knowledge, the crypto exchange moved the $1.8 billion in question to hedge funds including Alameda and Cumberland/DRW.
Backing its claims, Forbes revealed a reported outcome of an investigation of Blockchain data belonging to Binance. Per the report, Forbes studied Binance’s blockchain transactions between August 2022 to December 2022. Referencing the outcome of this alleged research, Forbes said B-Peg USDC tokens don’t have a sufficient reserve after Binance told holders that the tokens have adequate backup.
Forbes illuminated that the business practices of Binance are exposing users to huge risks. The publishing firm said the cryptocurrency exchange is threading similar path with the defunct FTX by mismanaging users funds.
Binance CEO’s reaction to the allegations
While responsing to these allegations, the Binance boss stated that Forbes doesnt understand how cryptocurrency exchanges works. He said the leadership of the crypto exchange didnt move any $1.8 billion as reported. Instead, the transactions were carried out by users of the crypto exchange themselves.
Also, the Binance CEO explained how the cryptocurrency exchange has stood the test of time. He recalled how the insolvency issue of top crypto firms late last year compelled users to withdraw their funds from centralized exchanges. During that period, Binance witnessed massive outflows. CZ stated that despite the outflows Binance didn’t crumble as it remains in operation. Furthermore, Changpeng Zhao emphasized that users are free to withdraw their deposit from the platform anytime they wish.
Accordingly, the Binance CEO explained how the crypto exchange has implemented a proof-of-reserves backed by new zero knowledge. With the PoR mechanism, CZ said Binance has been able to protect users’ privacy and their assets. Lastly, CZ submitted that at all times, the cryptocurrency exchange has always maintained a 1:1 reserve ratio. With that, the exchange has been able to effectively safeguard users’ funds while remaining in business.