There are many explanations for the nature and purpose of some of the chain transactions highlighted by Forbes, and they may be wrong. But Binance’s confusing and sometimes contradictory response to the findings does not inspire confidence, especially in the post-FTX era of widespread suspicion of central bankers with balance sheets.
Forbes reported this week that one day, August 1. On January 17, 2022, $1.78 billion was withdrawn from contracts on the Binance wallet intended to support stablecoins, specifically b-USC, a hedged version of Circle’s USDC. According to Forbes on-chain analysis, the fact that Binance is not in dispute, sent $ 1.2 billion to the Cumberland DRW trading company, and other funds are currently going to crush Alameda Research’s investment fund, the founder of Tron Justin Sun and cryptographic resources. and Amber Group services company. Importantly, according to Forbes, this exit was not accompanied by a corresponding decrease in the supply of b-USDC tokens.
Binance’s various attempts to provide an innocent interpretation of Forbes’ findings did not make it a coherent and unified matter – if only a complete confirmation of what could, n ‘worst case scenario, indicates misuse of customer funds. Before they released a report focusing on the details on Wednesday morning, Binance officials gave different, even contradictory, explanations. Equally irritating, Binance’s response continued the critical and defensive tone of many of its previous dismissals of special attention and scrutiny. Forbes’ analysis was inspired by the evidence of previous issues with Binance’s asset management practices. Binance admitted to Bloomberg that for some time it stopped supporting the 1:1 transparent support of its b-coins separately and effectively. In this case, the revolution’s attempt to show the investigative behavior of the press as “conspiratorial opinion”, while it suggests that the investigation is only by “gathering many opinions in the press” , is in the respect that an organization hopes to maintain. The leadership position in the company is very dangerous and tricky.
Binance CEO Changpeng Zhao even returned to the oldest place in the crypto industry, saying that Forbes reports nothing more than “FUD,” or fear, uncertainty, and doubt. But this lazy, instinctive rejection, now as always, ignores a simple truth: vague or incomplete answers from the people who need them most are the source of confusion. distance and concern over accepted facts and reasonable questions raised by journalists.
The least charitable interpretation of Forbes’ findings, which Lumida CEO and co-founder Ram Ahluwalia confirmed at CoinDesk’s “First Mover” event on Tuesday, is that Binance is engaging in a form of rehypothecation. That is, b-USDC-backed funds have lent to partners or put them at risk. Based on this possibility, Forbes compared his findings to the bad practices that led to the failure of FTX. It is a strong statement that research firm ChainArgos said in a report on January 2 that led to a special look at the program. “One person got a loan of about $1 billion for about 100 days,” ChainArgos said. “It’s not clear exactly what happened … but it’s very, very clear in the recent manual.”