What's going on with Binance?
Here's what I know 🧵
Here's what I know 🧵
Remember when Binance released proof of reserves to calm the market?
Well, the accounting firm that helped with that, Mazars Group, deleted the proof of reserves from its website.
And Mazars Group is pausing all work with Binance and its other crypto clients.
Well, the accounting firm that helped with that, Mazars Group, deleted the proof of reserves from its website.
And Mazars Group is pausing all work with Binance and its other crypto clients.
Last year, Sam Bankman-Fried bought out CZ's stake in FTX.
It was a $2.1 billion transaction, but CZ says they only have about $500 million of that left since it was in FTT.
It was a $2.1 billion transaction, but CZ says they only have about $500 million of that left since it was in FTT.
https://twitter.com/SquawkCNBC/status/1603419168648355840?t=nAOWbYpZa6X5ysQH9pj1GQ&s=19
Also, CZ says they "actually forgot" about that $500 million for a while.
Is forgetting about half a billion dollars supposed to make me feel more confident in their ability to properly run an exchange?
Is forgetting about half a billion dollars supposed to make me feel more confident in their ability to properly run an exchange?
But people are asking the question: could Binance be on the hook to pay that $2.1 billion back to FTX victims?
It could be viewed as a Fraudulent Conveyance, and bankruptcy courts can often claw back transactions years after the fact.
It could be viewed as a Fraudulent Conveyance, and bankruptcy courts can often claw back transactions years after the fact.
Binance CEO CZ appeared on CNBC yesterday.
It didn't go great.
It didn't go great.
https://twitter.com/unusual_whales/status/1603503573220069376?t=RY0RZQjNH6SqkyfJXS_b6w&s=19
The CNBC anchor asks why Binance doesn't get an audit from a Big 4 accounting firm.
CZ responds by saying that those firms don't actually know how to audit crypto exchanges.
CZ responds by saying that those firms don't actually know how to audit crypto exchanges.
In the same interview, CZ insists that audited financials are coming.
But just a few hours later, we hear that accounting firm Mazars Group is cutting ties with Binance.
But just a few hours later, we hear that accounting firm Mazars Group is cutting ties with Binance.
https://twitter.com/Bitfinexed/status/1603636761506320385?t=rmv0mEOt5tMj6speGdGnRg&s=19
We've also learned that Binance has seen billions in net withdrawals this week.
However, they haven't paused withdrawals or appeared to have had problems processing withdrawal requests.
However, they haven't paused withdrawals or appeared to have had problems processing withdrawal requests.
So what's going on here?
There are definitely some red flags:
👉 Evasive answers from CZ.
👉 The promise of a full audit sometime in the future.
👉 Assurances that Binance is financially strong without any specific evidence.
There are definitely some red flags:
👉 Evasive answers from CZ.
👉 The promise of a full audit sometime in the future.
👉 Assurances that Binance is financially strong without any specific evidence.
One of the big concerns is that even if Binance is correctly collateralized, that could change quickly if there's a run on the bank or if one of Binance's largest reserve holdings has issues.
https://twitter.com/mikealfred/status/1601078549230006273?t=tDNq5IR9BhWJ2I7iKbCRXw&s=19
This is a classic scenario for crypto exchanges: Everything is fine until it's not.
If Binance has the confidence of the market, then everything will be fine.
If the stablecoins in Binance's reserves hold their peg, everything will be fine.
If Binance has the confidence of the market, then everything will be fine.
If the stablecoins in Binance's reserves hold their peg, everything will be fine.
But look, Jim Cramer is bearish on Binance, so maybe everything will be just fine 🤷♀️
https://twitter.com/jimcramer/status/1603722392093728769?t=NVqOBOXE-yoGyNlMXhyMBQ&s=19
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