A report from Forbes media claimed that the Binance exchange allegedly used customers’ funds to fund the crypto hedge funds, just like bankrupt crypto exchange FTX did with customers.
Binance is a top-ranked digital assets trade platform and the current crypto trade volume on this exchange is $56 billion. The user interface of this exchange is much better and this is the reason why people choose this crypto platform as the best choice.
On 27 Feb 2023, Forbes published a report and claimed that the Binance collateral wallet fell to zero, and the exchange did not correct it for four months.
The report noted that Binance withdrew $3.63 billion from its peg wallet and later deposited $1.85 billion to the peg wallet but transferred the remaining $1.78 billion to a Binance 14 cold wallet.
Forbes’ investigation claimed Binance transferred those $1.78 billion funds to Cumberland, Amber Group, Alameda Research, and TRON founder Justin Sun.
The report noted that Binance failed to reduce USDC supply from the Bep20 network, which is a mandatory thing to maintain the supply of any coin on a third-party network. In short, if Binance will issue 100 USDC on the Bep20 network then Binance should maintain 100 USD in its collateral wallet, but Forbes’ report claimed Binance failed to follow its own rule.
Forbes claimed Binance followed a similar kind of bad financial activity, which was done by the FTX exchange.
Earlier in January of this year, Binance Chief Strategy Officer Patrick Hillmann clarified on similar kind of matter and assured that Binance never intermixed exchange & users’ funds but admitted that Binance mistakenly sent some funds to Binance cold wallet.
So far, Binance CEO Changpeng Zhao (CZ) didn’t respond on this matter but soon he will respond to this whole controversial report.