In addition to the macroeconomic headwinds, Binance rumors and the uncertainty surrounding Grayscale/DCG are clouding sentiment in the Bitcoin market. In a renewed effort to dispel the “FUD”, Binance has released a detailed report today in which the world’s largest crypto exchange addresses current questions from the media and community.
Although recently analytics companies like CryptoQuant and Nansen confirmed the existence of client funds on-chain, one of the biggest accusations against Binance at the moment is that it is a “financial black box”. Critics claim that the exchange led by Changpeng Zhao refuses to disclose financial information.
The exchange refutes these charges in its statement. It says it is not required to disclose detailed financial status for two reasons: First, it is not a publicly traded company; secondly, Binance is financially self-sufficient and does not require external funding. Moreover, it does not plan to go public at this time.
In addition, Binance discloses “operational and financial information” in the countries where it operates, as necessary, as “required by local regulators.” The exchange further added that “in some cases, the disclosure process takes up to six months due to the sheer volume of information.”
Further, Binance says its capital structure is debt-free, can cover all ongoing costs with revenue, and keeps assets completely segregated.
“Based on the principles of ‘customer first’ and ‘openness and transparency’, Binance will continue to promote on-chain asset reserve verification to make it easier for the outside world to query and verify user asset storage,” explains the statement out.
Other Binance “FUD”
A major argument against Binance’s integrity has also been the recent firing of accountant Mazar and why the company is not hiring a “Big Four” accountant. As the statement reiterates, Mazars pulled out of all crypto companies, not just Binance.
Regarding the audit by an accounting firm of the “Big Four,” the exchange clarifies that they have not collaborated with any crypto firm to verify on-chain reserves to date.
As for Coinbase’s partnership with DeloitteBinance says it is important to distinguish that the audit focuses on the financial status of the listed company, not the verification of on-chain reserves.
On-chain verification of encrypted corporate reserves is a whole new field. At this time, we are still actively communicating with companies that want to provide verification services for encrypted businesses, and we will share the latest progress with you shortly.
In addition, the exchange makes it clear on record that Bitcoin reserves verification is just the first step, and on-chain proof of reserves of some mainstream currencies will follow “as soon as possible.”
Bitcoin price eyes $16,900
Faced with the uncertainty and massive levels of FUD swirling the market, Bitcoin price is currently at critical support levels, though a retest of $16,600 doesn’t seem out of the question. If BTC manages to break the stubborn USD 16,900 resistance, a continuation in the zone to USD 17,500 would be conceivable.
Featured image of Binance, chart from TradingView.com