Following the publication of an article by Forbes regarding Binance and its recent “shuffling” of cash, CZ, the CEO, and co-founder of the firm Binance, turned to Twitter to respond. Changpeng Zhao (CZ), on February 28, dispelled the FUD brought about by the Forbes piece.
With the collapse of FTX, Forbes released an article that centered on the recent “shuffling” of funds by the cryptocurrency exchange Binance. The story was published in the aftermath of the FTX crash.
CZ: Forbes misread it all
The CEO reacted to the article by stating that it would appear that Forbes needed a fundamental understanding of how transactions occurred. However, he added that their users are not restricted regarding withdrawing their assets.
Throughout his tweets, he responded to various assertions in the Forbes piece. This included something that it called a “backroom maneuver” when Binance transferred $1.8 billion in stablecoin collateral to hedge funds like Tron, Amber group, and Alameda Research between August 17, 2022 and early December of that same year.
How transparent is Binance?
In a recent piece by Binance, the firm addresses why they are transparent after proof of reserve audits recently started making headlines amid the fraud witnessed after the FTX collapse.
According to the statement, Binance uses deposit wallets to receive user deposits and periodically moves these funds to hot or cold wallets to minimize the number of transactions and keep gas fees low. When users withdraw, Binance sends funds from the hot wallet and replenishes them from the cold wallet if necessary. Binance also holds operational funds in an account funded by commissions, which are used to pay for operating costs and employees.
Binance maintains customer balances, which are segregated from its assets, and conducts daily reconciliations to ensure all crypto assets held on behalf of customers are accounted for. Binance does not use client funds for its purposes and is committed to legal and regulatory compliance.
Binance invests heavily in security and considers its wallet infrastructure one of the industry’s most secure. For example, the $1 billion Industry Recovery Initiative was processed from a cold wallet, and the company uses Merkle Tree proof-of-reserves to verify user account balances. Overall, Binance prioritizes the security of user assets and strives to minimize transaction fees and comply with regulations.
