There is news for Binance. According to this, the leading names of the cryptocurrency community are making a statement. They also sow seeds of fear, uncertainty and doubt (FUD) once again. This time, a famous name is targeting the world’s largest cryptocurrency exchange, Binance. He suggests that Binance may follow in the footsteps of former rival FTX and face a potential collapse. Moreover, he is not alone in his claim. Let’s look at the details.
Binance and the new wave of FUD
The latest wave of FUD revolves around the price of Binance Coin (BNB). In particular, one of the key supporters of this negative sentiment towards Binance has ties to FTX. Adam Cochran, a well-known Binance critic. He is also a member of FTX. It now raises questions about potential bias.
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Lol claiming the BNB price is safe because of the safu fund while the recovery fund remains missing?
The fund was supposedly $1b in real stables and now consists of:
-$300m BNB
-$100m of “Binance pegged usd” (wtf is that?)
-$100m TUSD
-$400m in BTC https://t.co/pcRmXVtHR5— Adam Cochran (adamscochran.eth) (@adamscochran) August 19, 2023
Cochran’s recent concerns have focused on the Binance exchange’s Secure Asset Fund for Users (SAFU) and Industry Recovery Fund (IRI). Cochran claimed that SAFU funding may not be as safe as it sounds. The claim is that the Bitcoin (BTC) in the fund does not originate from a separate institutional reserve address, but rather from Binance’s main BTC hot wallet that holds client funds. This leads to speculation that Binance may be mixing institutional and client funds.
nonexistent fund
Also, Cochran says the IRI funding no longer exists. On the other hand, he claims it adds more to the uncertainty surrounding Binance. He claims that both SAFU and IRI funds are potentially used to stabilize the price of BNB. According to Cochran’s theory, something happens every time the price of BNB drops. Binance sells BTC from SAFU fund to support this.
The FUD around BNB’s price was first sparked by crypto analyst MartyParty, who claimed that BNB did not fall below $212 despite the current bear market conditions. Accordingly, like Cochran, MartyParty also makes the same claim. Binance CEO suggested that Changpeng Zhao may be selling Bitcoin (BTC) to prevent BNB from crashing.
Response to allegations
In response to these allegations, Binance CEO emphasized that the price of BNB is determined solely by the market. Zhao also points out the inconsistency of claims regarding a $30 to $120 million BNB repurchase. On the other hand, he states that such an amount represents less than 4% of the coin’s daily trading volume.
As FUD continues to circulate, Binance is facing scrutiny and skepticism from various quarters. Whether these concerns are justified or part of the ongoing volatility in the crypto space will ultimately determine the reaction of the market. As we stated as Kriptokoin.com, it is important to give an immediate response to such statements in the market.
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