Binance’s CEO Rejects Accusation of Binance to Mismanage the Assets of its Consumers like FTX

SEC officials have brought injunctions against Kraken, BUSD, and Terra Luna in the matter of unregistered securities. Binance and other major cryptocurrency enterprises have maintained that crypto firms may move to other regions of the world due to the increasing pressure from financial regulators. Some of the media houses like Forbes have once again raised allegations against the Binance exchange.

The accusations postulate that Binance is also mishandling the funds of its investors, much like FTX. To clear the matter, Binance CEO CZ has addressed the stakeholders and denied all such allegations. He also dismissed such ideas based on false representation. Meanwhile, there is some heat in the crypto market regarding Forbes allegations.

As soon as the cryptocurrency market started to show signs of recovery, government agencies, international banks, and media houses started information warfare. Forbes has purported in its article that Binance misused $1.8 billion to hedge funds such as Alameda and Cumberland last year. These funds were reserved for backing the stablecoin.

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The firm alleged that these funds were not reserved for BUSD but rather for another stablecoin called USDC. Blockchain data reveals that no funds were backing B-peg stablecoin before December.

However, the exchanges that had listed these tokens claimed that they were fully backed. The report suggests that the funds from customers that were meant to back these stablecoins were used in other financial ventures without the knowledge of the consumers, much like FTX.

Binance CEO Rejects Forbes Report 

CZ replied that the users at the exchange are free to withdraw their funds freely. He further maintained that the withdrawn funds are converted into collateral worth billions. CZ also talked about the implementation of Zero Knowledge based Proof-of-Reserves to ensure transparency and security without violating the privacy of its account holders.

He claimed that Forbes has not mentioned that the consumers at Binance must deposit their funds first before removing them. He explained that Forbes extended allegations without providing any proof to back their claims. The article by Forbes has arrived following Coinbase’s decision to stop trading BUSD stablecoin issued by Paxos following the coercion of the SEC.

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