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After the collapse of Mt. Gox and other centralized exchanges, investors have become wary of using such platforms.
Binance, the world’s largest cryptocurrency exchange, conducted an audit and published its reserves in order to prove that it is solvent.
The company conducted the audit via Mazars—which later removed its report from its website and paused auditing for the entire cryptocurrency industry.
This news caused panic among investors and rumors of Binance’s financial solvency began to spread.
In response to this, Binance’s CEO Changpeng Zhao attempted to quell fears by reassuring investors and clients that the company is financially strong—there need be no worry.
Despite speculation that the exchange might be insolvent, investors still see value in Binance’s tokens.
Investor Mike Alfred recently tweeted:
serve as a “decentralized CFO” according to the company.
2. Binance is an active discussions with potential new “Keystone” investors, including Warren Buffett’s Berkshire Hathaway, about an equity round that would provide support and credibility to the company.
— Mike Alfred (@mikealfred) December 22, 2022
One other point I forgot to share.
Binance DID raise VC funding at the beginning. The earliest round was $15m in equity. That equity was converted to BNB at some point so there are in fact no outside equity investors at this moment, according to the company.
— Mike Alfred (@mikealfred) December 22, 2022
Others claim that while Binance had a CFO, that individual was not privy to the full accounting records of the company— potentially making him a CFO in name only:
Binance’s former CFO did not have access to the company’s full accounting records during his 3 years there ??? 😲
That seems odds. Why would CZ be designing his business so that even his Chief Financial Officer cannot see everything? pic.twitter.com/bEQZm5LYQ0
— Wall Street Silver (@WallStreetSilv) December 19, 2022
Finbold had more of Mike Alfred’s claims:
Furthermore, according to Alfred, CZ’s company has also been having discussions “with a tier 1 auditor for a month,” and it invested $500 million in Twitter (NYSE: TWTR), as it burned $547 million of BNB in the last quarter of 2022.
FUD is a make believe smokescreen.
You have no corporate parent, no CFO, no domicile, no internal controls, no board of directors, no auditor, and no audited financials.
You are the least transparent organization of your size in human history.
That is the truth.
— Mike Alfred (@mikealfred) December 17, 2022
On December 19th, 2022 Reuters reported:
Yet a Reuters analysis of Binance’s corporate filings shows that the core of the business – the giant Binance.com exchange that has processed trades worth over $22 trillion this year – remains mostly hidden from public view.
Binance declines to say where Binance.com is based. It doesn’t disclose basic financial information such as revenue, profit and cash reserves. The company has its own crypto coin, but doesn’t reveal what role it plays on its balance sheet.
It lends customers money against their crypto assets and lets them trade on margin, with borrowed funds. But it doesn’t detail how big those bets are, how exposed Binance is to that risk, or the full extent of its reserves to finance withdrawals.
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