Is the Binance the next to bite the dust or FUD?

[bbc.reporter]

For the skeptical me, this paywalled article appears for me that American media has begun to publish the first stage of their after FTX fud campaign against CZ and Binance hehehe. The next stage might be during the trial of Sam later this year where some witnesses will be put on the stand to speak about what CZ did on FTT without giving the whole information on why CZ liquidated their position on FTT.



Binance’s Asset Shuffling Eerily Similar To Maneuvers By FTX

When you’re the world’s largest crypto exchange in a largely unregulated market, it is easy to make up the rules as you go. In its latest backroom maneuver, Binance transferred $1.8 billion in stablecoin collateral to hedge funds, including Alameda and Cumberland/DRW, leaving its other investors exposed.

Source https://www.forbes.com/sites/javierpaz/2023/02/27/binances-asset-shuffling-eerily-similar-to-maneuvers-by-ftx/



However, this article with more information makes me shake my head. Is this media attack by Forbes real or fud?



Forbes, yet again, investigated the on-chain activities of Binance and discovered that the exchange transferred $1.78 billion in users’ funds to various hedge funds. The article reveals that the Changpeng Zhao-led exchange completely emptied its collateral for B-peg USDC without reducing its supply.

Binance issues a B-token to facilitate the usage of other blockchain tokens in the BNB chain. The exchange is supposed to issue B-token only after storing 100% collateral of the original token. For example, for every 100 B-USDC, it must have 100 USDC as collateral.

However, the exchange broke its rules on Aug. 17, withdrawing $3.63 billion from its peg wallet to the “Binance 8” cold wallet. It then returned $1.85 billion to the peg wallet but transferred the remaining $1.78 billion to a Binance 14 cold wallet. Later, the exchange distributed the funds to a trading firm, Cumberland, Amber Group, Alameda Research, and TRON founder Justin Sun.

When Binance withdrew $1.78 billion USDC on Aug. 17, it did not decrease the supply of the B-USDC. The collateral fell to zero, and the exchange did not correct it for four months.

The article also states that B-USDC was deficient by over $1 billion on three different occasions. Forbes believes Binance is misusing customers’ funds, similar to the bankrupt exchange FTX.

Source https://beincrypto.com/binance-misusing-customers-funds/

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[mk4]

The next stage might be during the trial of Sam later this year where some witnesses will be put on the stand to speak about what CZ did on FTT without giving the whole information on why CZ liquidated their position on FTT.

Is CZ/Binance even required to disclose why they liquidated their FTT position? They're investors in the FTT token, and they have every right to sell it as long as it's already vested (which it already was) without the need to disclose the reason as Binance is a private company anyway.

[mindrust]

I think binance is a serious exchange and they won't go down easily. FTX was a clown since the beginning. I've never ever created an account at FTX and the moment I heard people talking about FTX, I was like wtf "where did this thing come from?" If it was something decent I would have heard of it. Same thing goes to crypto.com. I haven't heard of anybody using their services but I see now outside of this forum that they are kind of big. FTX was like crypto.com too and It wasn't a coincidence that crypto.com was targeted right after FTX. It is because they are pretty similarly shitty.

Binance on the other hand has real users. Real trades happen there. So it is not one of those wash trading exchanges.

May it go down? Sure. However there are other exchanges that should go down first.

[NotATether]

The only thing I'm really expecting is some price activity with BUSD going down (slightly, being a stablecoin after all) after the SEC ordered Paxos to stop minting it.

BTW, am I the only one surprised that Binance was not minting their own stablecoin all this time?

[Rikafip]

For the skeptical me, this paywalled article appears for me that American media has begun to publish the first stage of their after FTX fud campaign against CZ and Binance hehehe. The next stage might be during the trial of Sam later this year where some witnesses will be put on the stand to speak about what CZ did on FTT without giving the whole information on why CZ liquidated their position on FTT.

There's been a lot of attack on Binance since FTX downfall so I definitely see this scenario plausible. Either way, anyone who still has money on any exchange after everything that has happened is playing a dangerous game.
Since Bloomberg article is paywalled, here is the archived version.

I think binance is a serious exchange and they won't go down easily. FTX was a clown since the beginning. I've never ever created an account at FTX and the moment I heard people talking about FTX, I was like wtf "where did this thing come from?"

Just because you never used FTX doesn't mean that others didn't. FTX was being mentioned quite often here on bitcointalk, people liked "no withdrawal fees and no KYC approach" and it was even dubbed as a "new Binance". After all, if many people didn't use FTX, it wouldn't have such an impact on the market.

Regarding this "where did they come from", Binance also kinda came out of nowhere back in mid 2017 and just 6 months later they were already the exchange with the biggest volume so when FTX showed up, their  growth was nothing that we haven't seen seen before.

Binance on the other hand has real users. Real trades happen there. So it is not one of those wash trading exchanges.

All exchanges do that to some degree. Some more, some less, but I don't believe reported numbers one bit even if it comes from Binance or Coinbase.

[LoyceV]

Am I the only one who'd like to see Binance disappear? They've scammed users, and they're pretending all kinds of centralized made-up tokens are "Bitcoin" to increase their own wealth. Bitcoin and Bitcoin users are better off without Binance.

[yhiaali3]

I know as do many here on the forum that Binance is not completely honest, they have had some shady moves in the past and still, there have been members who are skeptical about CZ's intentions to swallow the market entirely.

But despite all that, I'm not happy with the US government's attempt to bring Binance down. I think their goal is beyond that. They are seeking to completely hit Crypto, I guess. They are following Binance's mistakes aggressively because they know that hitting it will be a very painful blow to Crypto.

Some are happy with what is happening to Binance because they think it will reduce the centralization in Crypto that Binance is trying to create by controlling the market, but at the same time I fear that hitting Binance will be like an earthquake in the Crypto market.

[Little Mouse]

Am I the only one who'd like to see Binance disappear?

Of course not you are the only one. Count me in. I have been deceived by them on referral issue. Besides, I don't like CZ monopoly moves. Can you remember CZ wanted to rollback a BTC transaction when his exchange lost around 7k BTC to hacker? I hate him since then. He wants centralization power, he wants to rule crypto. I hate him and so does Binance.

[LoyceV]

Can you remember CZ wanted to rollback a BTC transaction when his exchange lost around 7k BTC to hacker? I hate him since then. He wants centralization power, he wants to rule crypto.

The good thing is: he can't rule Bitcoin. But the bad thing is, he can trick many people into believing his BS. I really don't get it: so many people nowadays act as if online billionairs are their friends, while the rich guy's actions aren't in your interest.

[inthelongrun]

I am not even a big fan of Changpeng Zhao but there are too many companies and people in the media industry that are one-sided, influenced, opportunists, and bribed. Sam Bankman-Fried and his family are very influential and indebted to a lot of companies, wealthy people, and politicians. No wonder he is now imprisoned in a family mansion with a swimming pool. CZ sunk FTX but there was a valid reason behind its withdrawals and it also has the right to do so. I don't think Binance will follow FTX's route. Not this time.

[o_e_l_e_o]

Later, the exchange distributed the funds to a trading firm, Cumberland, Amber Group, Alameda Research, and TRON founder Justin Sun.

So, literally the exact same shit which caused FTX, Celsius, Voyager, BlockFi, and more to go bankrupt? Customers deposit money, exchange takes that money and trades/gambles/loans it for their own profit. So absolutely not "too big to fail", and like every other centralized exchange, running a fractional reserve system and a single bank run away from insolvency.

Also hilarious that on the surface Binance and CZ bleat on about their provably useless pRoOf Of ReSeRvEs, and under the surface they have a completely uncollaterized "stable" coin with a deficit of almost $4 billion. And by the way, who in their right mind is using a token pegged to a stablecoin pegged to a rapidly inflationary fiat currency!? I-heard-you-like-third-parties-so-I-put-a-third-party-in-your-third-party-meme.jpg

Am I the only one who'd like to see Binance disappear?

Here's hoping. They've been trying to centralized the entire space around them for some time, and they outright lie and scam to their users constantly.

[Yamane_Keto]

Am I the only one who'd like to see Binance disappear? They've scammed users, and they're pretending all kinds of centralized made-up tokens are "Bitcoin" to increase their own wealth. Bitcoin and Bitcoin users are better off without Binance.

We all may want it, and will it be regular or random? Based on Proof of Reserves, Binaance owns 250,597 bitcoins, which is four times what happened when Luna crashed, not to mention the impact of the platform and its investments, which means that the impact on the price will continue for several years, not months.

supporting competitors and having strong competition is the solution.

[Z-tight]

Based on Proof of Reserves, Binaance owns 250,597 bitcoins,

You cannot trust figures from their proof of reserves, they only tell you want they want you to know and what would make you think that they are safe from collapse, so don't trust it.

which means that the impact on the price will continue for several years, not months.

I don't know how big the impact of Binance collapse would be to the price of BTC, it would surely cause a plunge in the price for sometime but BTC would surely be alright, and the long run benefits would be great. It would lead to many shitcoins being expunged from the crypto market. Many people believe Binance is infallible, a collapse would make them know better that self custody is the only right way to store BTC, it would also make many BTC users more interested in decentralized p2p exchanges and start using them for their trading.

supporting competitors and having strong competition is the solution.

Centralized competitors are not any better.

[batang_bitcoin]

A friend of mine in the US told me to be careful with Binance just this day. As that what he sees on the news and what a coincidence when this thread has been made.
I'll oblige and would take out the little fund that I've got there. It won't be surprising even Binance bites into dust as that's mostly will really happen to these centralized exchanges unless they're serious and real with their business. Even if they're quite big already, that doesn't make them exempted to any potential fall on their business.

[NeuroticFish]

While CZ clearly cannot be trusted, I think that Binance, even if it may be in a difficult situation, may get lucky. I think that Bitcoin price going up has relieved a lot of pressure from all those doing odd businesses, since now their reserves (most probably fractional) worth more in USD.

BUSD may go down. But it won't drag Binance with it. At least that's what I think.

[o_e_l_e_o]

Based on Proof of Reserves, Binaance owns 250,597 bitcoins

Their proof of reserves is not worth the HTML it is printed on.

It is absolutely trivial for them to fudge the Merkle tree by simply including an account with a negative balance. This is exactly what FTX were doing to "balance" their books - they simply created a fake user account and then loaded it up with $8 billion in liabilities. And even if their Merkle root is not tampered with, it does not include any institutional liabilities, loans, open trading positions, and so on. Binance could be massive in the red and we would never know, regardless of what the proof of reserves says. And let's not even touch on the fact that they moved billions of dollars of crypto in to their account the day before they submitted to a third party audit, and then moved it all out again shortly after. Suspect much?

which means that the impact on the price will continue for several years, not months.

If Binance collapses, there will be $10 billion in BUSD people will be dumping and trying to convert back to bitcoin. There will be $50 billion in BNB and countless more billions in centralized tokens on the various Binance centralized scamchains people will be dumping and trying to convert back to bitcoin. There will be an unknown number of small alts where Binance makes up almost all of their volume, which people will be dumping and trying to convert back to bitcoin. And long term, there will be an awful lot of people who learn a hard lesson about centralized shitcoins and stick to bitcoin from then on.

[bbc.reporter]

The next stage might be during the trial of Sam later this year where some witnesses will be put on the stand to speak about what CZ did on FTT without giving the whole information on why CZ liquidated their position on FTT.

Is CZ/Binance even required to disclose why they liquidated their FTT position? They're investors in the FTT token, and they have every right to sell it as long as it's already vested (which it already was) without the need to disclose the reason as Binance is a private company anyway.

I was not implying that CZ would be called on the witness stand. I was speculating that it would be some FTX employees would be given time to speak during the trial as witnesses to tell the whole story. People in the cryptospace already know it was CZ that triggered the liquidity cascade on FTX's leveraged positions backed by FTT as collateral. However this might be big news for people from the mainstream. An occurence worthy for a movie about hustlers and scammers hehehehe.

In any case, if CZ was called on the witness stand, I reckon he would be forced to tell the truth and nothing but the truth. I am not certain if he can hide behind nondisclosure agreements or invoke his right to privacy in court.

[Darker45]

Binance might one day finally bite the dust, but it's probably not the next. It had just survived billions in withdrawals in a matter of hours. Such huge and fast outflow of money could have brought other giant platforms to their knees.

In the interest of fairness, a scathing article like the one recently published by Forbes should have at least included the response of CZ. Otherwise, I would consider it ill-intentioned, more FUD than news. At least, that's how I know fair journalism works. I don't trust Forbes.

I have never been a fan of CZ and Binance-- let them fall any time, I don't care; I'm one with LoyceV-- but it is indeed noticeable how the guns and cannons are now all directed to them when the spotlight should be on SBF. Anybody could easily observe how utmost leniency and tolerance are readily afforded to SBF when in fact he's the one who made the most damage.

[LoyceV]

Based on Proof of Reserves, Binaance owns 250,597 bitcoins

This doesn't prove anything about how much they owe their users. If their users think they have 300,000 Bitcoins on their exchange, they're "a few" coins short.

which is four times what happened when Luna crashed, not to mention the impact of the platform and its investments, which means that the impact on the price will continue for several years, not months.

Even if that happens: that's not a problem for Bitcoin. Bitcoin will work at any price.
The real problem is people believing some tokens CZ pulled out of his ass are Bitcoins.

supporting competitors and having strong competition is the solution.

I stopped using Binance years ago, when the Chinese company started demanding my paperwork. Nowadays they're registered in the Cayman Islands. To me, a registration in the Cayman Islands tells me all the company cares about is making money, at all costs.

In Binance's case, you can take the "making money" literally.

[Little Mouse]

The good thing is: he can't rule Bitcoin.

Yeah, I know that. If he could, he would definitely do this by now. But still, with such knowledge on blockchain and cryptocurrency, how come he even says that?

Based on Proof of Reserves, Binaance owns 250,597 bitcoins

This doesn't prove anything about how much they owe their users. If their users think they have 300,000 Bitcoins on their exchange, they're "a few" coins short.

Besides, if I'm not wrong this reserve doesn't prove that they had collateral for their BUSDC token. For every BUSDC, they must hold 1 USDC. This is my understanding regarding this issue. Can someone correct me if I'm wrong?