- Binance denied secretly moving $1.8 billion BUSD collateral.
- Forbes claimed Binance left BUSD holders exposed by removing the collateral.
- Binance CEO said Forbes ignored deposit transactions to categorize Binance with FTX.
Binance, the largest crypto exchange, has refuted the claim by Forbes that the business secretly moved $1.8 billion in collateral designed to support the Binance stablecoin, BUSD.
“While Binance has previously acknowledged that wallet management processes for Binance-pegged token collateral have not always been flawless, at no time was the collateralization of user assets affected,” a Binance spokesperson told journalists yesterday.
In an article on Monday, Forbes claimed Binance transferred $1.8 billion in stablecoin collateral to hedge funds, including Alameda and other undisclosed uses, “leaving its other investors exposed.” Forbes based its argument on blockchain data from August to early December 2022, about the time FTX imploded.
However, the Binance representative said the on-chain transactions identified relate to internal wallet management. The spokesperson added:
Processes for managing our collateral wallets have been fixed on a longer-term basis, which is verifiable on-chain.
Although Forbes quoted Binance’s chief strategy officer, Patrick Hillman, who said moving money among multiple wallets was not a problem and a common practice at the firm, “There was no commingling: there are wallets, and there is a ledger,” Hillman said.
Furthermore, the CEO of Binance, Changpeng Zhao, commented on the matter, accusing Forbes of intentionally misconstruing facts. “They seem not to understand how an exchange works,” Zhao said.
I am reluctantly spending time on FUD again (4). Forbes wrote another FUD article with lots of accusatory questions, with negative spins, intentionally misconstruing facts. They referred to some old blockchain transactions that our clients have done. 1/9— CZ Binance (@cz_binance) February 28, 2023
The Binance CEO further clarified that users must deposit to the exchange first to withdraw, and the process is also easily traceable on the blockchain. He argued that the article conveniently ignores the deposit transactions and tries hard to categorize Binance and FTX together.
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