Binance Faces Proof of Reserve FUD, CZ Defends on Twitter

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Binance is in FUD and CZ is fighting back.

Binance CEO fights through FUD

Binance, the world’s largest crypto exchange, is facing a number of public accusations that are causing “fear, uncertainty and doubt” (FUD) in several areas of the company.

The company has faced several headlines in recent weeks, with some notable pieces of attention just from December 11-12.

A few Binance headlines from the last 24 hours:

– The US Department of Justice may charge Binance Ekecs with money laundering

– Binance Locks Withdrawals for Some Accounts Amid What CEO Calls ‘Just Market Behavior’

– Binance’s proof of reserves raises red flags

— Genevieve Roch-Decter, CFA (@GRDecter) December 12, 2022

CZ explained the recent account outages for many users during December 11th.

Based on our research so far, this seems to be just the behavior of the market. One guy invested and started buying. (Hackers don’t lie). Other boys followed. I don’t see a connection between the accounts. 1/3 https://t.co/KlB1VnlHVs

— CZ 🔶 Binance (@cz_binance) December 11, 2022

In the past week alone, the crypto company has also faced more negative attention.

Notably, Kraken CEO Jesse Powell continued the CEKS wars through several tweets on December 8th. Powell highlighted several red flags in the recent audit of Binance’s Proof of Reserve by Mazars.

ok i’ll give you a hint. This is just an easy thing to say that this is OBVIOUSLY not a traditional proof of reserves, and it should have gotten the actual journalists digging right away.

Why use collateral value? Why are negative balances included? No wallet signing? Who issues BTCB & BBTC? pic.twitter.com/F9u4KSJ5VSi

— Jesse Powell (@jespov) December 8, 2022

Former head of the SEC Internet Enforcement Office, John Reed Stark, has also used his platform recently to spread FUD about Binance’s proof of reserves and opaque leadership.

Binance’s “Proof of Reserves” report does not address the effectiveness of internal financial controls, does not express an opinion or conclusion on assurance, and does not guarantee figures. I have worked in SEC Enforcement for over 18 years. This is how I define a “red flag.” https://t.co/6oEkmArjS9

— John Reed Stark (@JohnReedStark) December 11, 2022

Binance’s CEO Changpeng Zhao (CZ) took to Twitter to publicly reassure users and investors. Just two days removed from going on the defensive with Kevin O’Leary, Binance had to fight back against money laundering FUD from Reu ters.

Others have also questioned the original story that started the FUD.

How to create FUD vs #Binance 101. 👇

Take the news of 2018, recycle it and turn it into breaking news in 2022 in revenge for #FTKS collapse.

if you didn’t know, #CoinDesk is owned by Digital Currency Group or those behind Grayscale which has been in trouble lately… pic.twitter.com/42anGVuARh

— Duo Nine | discord.gg/icc (@DU09BTC) December 12, 2022

CZ eventually followed through with encouragement to fight it out and “keep building.”

Overall, the FUD against Binance feels strong and real. Questions still remain about the company’s liabilities and whether or not they have been audited. CZ also monarchically revoked one person’s access to some tweets.

It was hard to imagine that FTKS was insolvent. It’s hard to imagine the same for Binance. Institutions certainly want crypto and Binance at this point. CZ and Binance are right to be on the defensive, but they need to back it up by walking their reserves.

What is Binance:

Binance is positioning itself as the world’s leading blockchain ecosystem and crypto-asset infrastructure provider with a suite of financial products that includes the largest digital asset exchange by volume. The Binance platform aims to increase money freedom for users and features a comprehensive portfolio of crypto asset products and offerings, including trading and finance, education, data and research, social good, investment and incubation, decentralization and infrastructure solutions.