BNB

Binance Faces FUD for Proof of Reserves, CZ Defends on Twitter

Binance is in the FUD hot seat and CZ is hitting back.

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December 13, 2022

Binance CEO Fights Through FUD

Binance, the largest crypto exchange in the world, is facing a number of public accusations that are causing “fear, uncertainty, and doubt” (FUD) about several areas of the company.

The company has faced several headlines in recent weeks, with some remarkable pieces of attention on December 11-12 alone.

A few Binance headlines from the last 24 hours:

- US Justice Department may charge Binance Execs for money laundering

- Binance locks withdrawals for some accounts amid what CEO calls 'just market behavior'

- Binance's proof of reserves raises red flags
— Genevieve Roch-Decter, CFA (@GRDecter) December 12, 2022

CZ explained the recent account stalls for many users over Dec. 11.

Based on our investigations so far, this appears to be just market behavior. One guy deposited funds and started buying. (Hackers don’t deposit). Other guys followed. Can’t see linkage between the accounts. 1/3 https://t.co/QlB1VnlHVs
— CZ 🔶 Binance (@cz_binance) December 11, 2022

In just this past week, the crypto company has also faced more negative attention.

Notably, Kraken CEO Jesse Powell continued the CEX Wars through several tweets on December 8. Powell highlighted several red flags in Binance’s recent Proof of Reserve audit by Mazars.

ok, I'll give you a hint. This is just the easy stuff that says this OBVIOUSLY is not a traditional Proof of Reserves, and should immediately have had actual journalists digging.

Why use collateral value? Why negative balances included? No wallet signing? Who issues BTCB & BBTC? pic.twitter.com/F9u4XJ5WSi
— Jesse Powell (@jespow) December 8, 2022

Former Chief of the SEC Internet Enforcement Office, John Reed Stark, has also used his platform lately to spread FUD about Binance’s Proof of Reserves and opaque leadership.

Binance’s “proof of reserve” report doesn’t address effectiveness of internal financial controls, doesn’t express an opinion or assurance conclusion and doesn’t vouch for the numbers. I worked at SEC Enforcement for 18+ yrs. This is how I define “red flag. https://t.co/6oEqmArjS9
— John Reed Stark (@JohnReedStark) December 11, 2022

Binance's CEO Changpeng Zhao (CZ) has taken to Twitter to calm users and investors publicly. Just two days removed from getting defensive with Kevin O’Leary, Binance had to hit back at money laundering FUD from Reu ters.

Others also called into question the original story that started the FUD.

How to create FUD against #Binance 101. 👇

Take news from 2018, recycle it and turn it into Breaking News in 2022 as revenge for #FTX collapse.

If you did not know, #CoinDesk is owned by Digital Currency Group or the ones behind Grayscale which is in trouble lately... pic.twitter.com/42anGVuARh
— Duo Nine | discord.gg/ycc (@DU09BTC) December 12, 2022

CZ ultimately followed with encouragement to fight through and “keep building.”

Ignore FUD. Keep building!
— CZ 🔶 Binance (@cz_binance) December 12, 2022

Overall the FUD against Binance feels strong and real. Questions still remain about the company’s liabilities and whether or not they failed a recent audit. CZ also monarchically revoked access for a single person for some tweets.

It was hard to imagine that FTX was insolvent. It’s hard to imagine the same for Binance. The institutions are certainly out for crypto and Binance at this time. CZ and Binance are right to be on the defensive but must back it up by walking the walk with their reserves talk.

What is Binance:

Binance positions itself as the world’s leading blockchain ecosystem and crypto-asset infrastructure provider with a financial product suite that includes the largest digital asset exchange by volume. The Binance platform aims to increase the freedom of money for users and features a comprehensive portfolio of crypto-asset products and offerings, including trading and finance, education, data and research, social good, investment and incubation, decentralization, and infrastructure solutions.