Binance in trouble: is this the end of the cryptocurrency industry? – Gizchina.com

With Binance, doubts grow. The financial stability of the top cryptocurrency exchange in the world cannot be guaranteed, there is open discussion even just a few weeks after the collapse of FTX. By detailing his reserves and reiterating his support for regulation, Changpeng Zhao, the founder and CEO of Binance hoped to show investors that he was being transparent. But analysts and financial professionals are losing faith in him.
The reports regarding its reserves don’t hold up. The fact that Binance is a privately held business and is not publicly traded means that it is not required to provide in depth financial audits. Yes, he has provided several reports on transparency and reservations, but the Wall Street Journal’s expert witnesses note that it is challenging to be satisfied.
“Binance hasn’t made any announcements that give an overview of its liquidity or financial situation. Neither has it stated any intentions to do so” explains US Public Company Accounting Oversight Board top auditor Douglas Carmichael.
The report only has three numbers in total. The independent Mazars study is not commensurate with the caliber of business that Binance claims to be. A brief document with only three figures about Binance’s reserves in practice. The South African auditor explains that he “cannot articulate a conclusion” in addition to the limited information. Which makes even the data he provides unreliable.
Bitcoin Cash cryptocurrencies
According to the WSJ, the data shows that they have 597,602 Bitcoins in customer accounts and 582,486 Bitcoins in asset accounts. A 245 million dollar disparity that, according to Binance, can be accounted for by the client lending program. Client funds would then be 97% or 101% guaranteed as a result.
They promise to release additional details soon. Beyond the veracity of the data, it is apparent that there hasn’t been a thorough and thorough audit. According to John Reed, a former employee of the US regulator for more than 18 years, this is a full fledged “red flag”.
According to Binance, it is merely the “initial stage in a very long process.” In other words, he makes an excuse about the difficulty of examining his reserves. But there are already a lot of questions that needs answers.
The CEO of Binance is under investigation for money laundering. Additionally, since 2018, we know that executives of Binance are the subject of an investigation by the US Department of Justice. A conclusion will take place from a criminal inquiry into alleged money laundering.
American Justice has reservations. The Department of Justice has postponed releasing the findings of its criminal probe against Binance, according to Reuters. While some prosecutors are unsure. Half of the prosecutors think there are solid reasons to bring money laundering charges against Changpeng Zhao and several other officials of Binance.
Beyond what the judges later learn, prosecutors’ harsh posture toward Binance might substantially undermine trust in the cryptocurrency industry. Where Binance plays a very prominent role.
bitcoin
It is worth to mention that, after the fall of FTX, Binance defends the need to regulate cryptocurrencies.
“We have decided that we will not pursue the possible acquisition of FTX.” said Changpeng Zhao, CEO of Binance. But the consequences are shaking the entire cryptocurrency market. Now the executive of the world’s largest exchange has the difficult role of being calm in the sector. Preventing panic from spreading further.
“We need regulation.” In a recent interview, Zhao explained that “as an industry, we need more transparency. We need to work together with regulators around the world to make the industry more robust. Regulators have an important role to play, although we cannot blame anyone for this”.
Tech journalist since 2012. I love everything related to new technologies. I’m also passionate about video games. My goal is to inform you of the latest tech news and make you enjoy reading 😉 I am always looking to discover new things. This little geek is surely looking forward to growing up.

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Post expires at 1:11pm on Wednesday March 15th, 2023

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