- Binance is witnessing an exodus of executives amid mounting regulatory troubles.
- Binance CEO Changpeng “CZ” Zhao has come out to address concerns.
- Despite Zhao’s assurances, concerns remain over the firm’s perceived lack of transparency.
Binance is experiencing significant turbulence. Faced with growing legal and regulatory troubles, at least ten top executives have abandoned ship since July 2023.
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Amid this turbulence, Binance CEO Changpeng “CZ” Zhao has attempted to reassure investors by portraying an image of strength.
Binance’s CZ Addresses Concerns
In a Twitter statement on Thursday, September 7, Binance’s Zhao conceded that a lot has been happening with the firm, outlining unspecified negative rumors, bank runs, lawsuits, employee and market exits, and more. However, he maintained that the firm remained strong.
According to Zhao, the firm has zero liquidity concerns. “All withdrawals (and deposits) are properly handled. All customer funds are #SAFU and 100% reserved,” he added.
The Binance chief further asserted that the firm has recorded wins in court, launched new products, made new hires, entered new markets, and maintained its core founding team. Zhao did not specify what court wins he was referring to, but in March 2022, a U.S. judge dismissed a lawsuit accusing Binance of operating as an unregistered securities exchange. The judge ruled that the plaintiffs had waited too late and that U.S. law did not apply to the international exchange.
Despite the Binance chief’s latest assurances, fears remain. These fears have not been helped by lingering concerns over a perceived lack of transparency in the firm’s Proof-of-Reserve (PoR) reports.
Binance’s Tenth PoR: Much of the Same?
Binance recently released its tenth PoR report, allowing customers to see and verify their balances on the exchange. The self-verified report showed that the firm held overcollateralized reserves for 31 of its 350 supported assets, with 618.12k BTC, 4.09 million ETH, 34.5 million BNB, and 18.2 billion USDT.
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Nonetheless, the firm’s lack of liability disclosures continues to raise eyebrows. Without the disclosure, it remains impossible for investors to gauge its solvency.
On the Flipside
- In June 2023, the SEC accused Binance of routinely commingling customer deposits.
- Former FTX CEO Sam Bankman-Fried had assured customers that everything was fine at the exchange shortly before filing for bankruptcy.
Why This Matters
Binance is facing immense regulatory and legal pressure worldwide. Amidst these troubles, the recent flight of executives from the exchange has deepened concerns over the business’s health.
Read this to learn more about Binance’s executive exodus:
Binance Executive Exodus Continues as Russia Chiefs Bow Out
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