Consumers want reassurance as fear, uncertainty and doubt pollute the crypto world. At the same time, the cryptocurrency industry is equally keen on enhancing user confidence through a combination of stability, trust, and regulation surrounding internal reporting and controls.
This follows the widely reported collapse of cryptocurrency exchanges. FTX last monthcontinues to disrupt companies scrambling to provide transparency across reserve ranges to reassure users that they have access to sufficient liquidity and collateral to prevent a potential bankruptcy event. .
In particular, industry leader Binance is trying to show the world how it differs from its former rival FTX. Zhao Changpeng (aka “CZ”) is the founder and CEO of Binance, who quickly offered to acquire FTX as part of the bailout.
However, a quick scan of the targeted company’s books revealed that they were missing, and then Binance was discovered. get out The deal leaves FTX with little recourse other than to declare bankruptcy.
Binance is reportedly about as big as the New York, London and Tokyo stock exchanges combined, and the company is looking to solidify its position in the market as the industry consolidates and shines. is. — in bookkeeping and balance sheets.
Binance Balance Sheet Remains a Mystery
As PYMNTS reported, some industry watchers felt: Binance’s recent audit didn’t go far enough on the transparent front.
Mazar, which conducted the exercise, Stated They added that the report “does not express any opinion or endorsement conclusion” and “makes no statement as to the appropriateness” of its work for cryptocurrency exchanges. Mazars’ report focuses solely on Binance’s Bitcoin holdings and debt. Still, it did not extend the scope of the audit to any of the many other cryptocurrencies held and traded on Binance.
“With additional procedures, other matters that would have been reported may have come to our attention,” the auditor wrote in a statement. For retail investors who trust their money in exchanges or schemes, this is not a reassuring conclusion.
Representatives for Binance and Mazars did not respond to PYMNTS requests for comment.
As a private company, Binance is permitted to keep its financial statements private. The company has yet to provide a full and comprehensive overview of its financial situation and is reportedly working on his five-page letter from Mazars and the exchange’s other cryptocurrency holdings. does not indicate its plans, except for the report of
Clearly, as Bitcoin investors have, the stakes are huge, both for the company and the volatile industry in which it resides. Moved over $1 billion November alone saw the largest outflow of digital assets on record, while highlighting a lack of consumer confidence.
Like FTX and most other exchanges, Binance employs a complex corporate structure made up of various affiliates licensed in a wide range of jurisdictions. Even who the ultimate parent company of Binance is remains unknown, but the company’s founder, CZ, is listed as the majority owner of the Binance.com exchange and Binance’s U.S. operations.
At the very least, the complexity of Binance’s corporate structure makes it more difficult to get a clear picture of the company’s balance sheet. It does not take into account the ever-changing value of its crypto assets.
Facts Binance Maintains Collected funds Both the cryptocurrency industry itself and the wider cryptocurrency industry have done little to allay investor concerns.
There is also the fact that criminal investigation An investigation focused on Binance’s compliance with US anti-money laundering (AML) laws has been ongoing since 2018.
war of the giants
Elsewhere, another skirmish is underway that could define the future of crypto trading.stablecoins, etc. Tether (USDT)Supposed to be 1:1 backed by fiat currency. Tether was his FTX favorite, reportedly accounting for nearly a third of his total trading volume on USDT.
Exchanges are now on either side. Coinbase tells customers: switch from tether Other assets pegged to the USDC stablecoin that the exchange itself was involved in establishing and offering users to swap for free.
At the same time, Binance will automatically launch users’ own stablecoins BUSD, a stablecoin developed by the company. That initiative also excludes Tether.
It remains to be seen whether the ongoing integration of stablecoins will make the financial accounts of cryptocurrency exchanges easier to explain.
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