{"id":14327,"date":"2022-12-19T10:52:56","date_gmt":"2022-12-19T14:52:56","guid":{"rendered":"http:\/\/cryptocornercafe.com\/cafe\/?p=14327"},"modified":"2022-12-19T10:52:56","modified_gmt":"2022-12-19T14:52:56","slug":"binance-controversy-continues-as-experts-warn-of-serious-fallouts-due-to-fud","status":"publish","type":"post","link":"http:\/\/cryptocornercafe.com\/cafe\/2022\/12\/19\/binance-controversy-continues-as-experts-warn-of-serious-fallouts-due-to-fud\/","title":{"rendered":"Binance Controversy Continues As Experts Warn Of Serious Fallouts Due To FUD"},"content":{"rendered":"

Binance rumors were the all-dominant topic last week after the FOMC meeting. Rumors of insufficient proof of reserves and the pullback from accounting firm Mazars, allegations of a bank run and insolvency, as well as CZ\u2019s interview<\/a> on CNBC have dragged the Bitcoin and crypto sentiment and prices down.<\/p>\n

Charles Edwards of Capriole Investments pointed out in a Twitter thread that this \u201cFUD is really bad for the industry,\u201d pointing out that there is \u201cnothing\u201d backed by data that is legitimately worrisome, \u201cbut when fear is great enough, it doesn\u2019t matter.\u201d<\/p>\n

\u201cIf current withdrawal rates continue, expect more exchanges to go down \u2013 not from poor practices \u2013 but bankruptcy,\u201d Edwards contended.<\/p>\n

Is The Binance FUD \u201cThinly Veiled Xenophobia\u201d?<\/h2>\n

The analyst suggests<\/a> that all exchanges are being hit extremely hard by current market conditions. They have to deal with a price drop of more than 80%, a drop in trading volumes of more than 90% and a reduction of reserves by more than 50% \u201cdue to irrational panic.\u201d<\/p>\n

As Edwards analyzes, even the U.S. exchanges Coinbase, Gemini and Kraken have been hit badly. They are currently experiencing a 60% drop in their Bitcoin reserves over the past year.<\/p>\n

Addressing Bitcoin maxis, in particular, Edwards said:<\/p>\n

I love Bitcoin. But the maxis screaming for cold storage only, don\u2019t realize that if everyone actually went to cold storage, your precious Bitcoin price would approach $0. Influencers spreading FUD are literally damaging the industry & their net worth just to pump engagement.<\/strong><\/p>\n

At the same time, Edwards emphasized that his opinion on Bitcoin has not changed. He said the current price movement is largely fueled by panic. Still, Edwards spoke from the heart of many crypto enthusiasts when he turned to Changpeng Zhao and said:<\/p>\n

And CZ, let\u2019s stop dilly dallying and put this issue to bed with a _real_ audit.<\/strong><\/p>\n

Edwards was joined by market analyst Alex Kruger, who denounced the people who view bank runs as healthy stress tests. Those people \u201cclearly haven\u2019t thought this through. When funds leave, trading activity diminishes, and so do trading fees. And then, many funds never come back.\u201d<\/p>\n

Ryan Selkis, the founder of Messari, claimed<\/a> much of the Binance FUD is \u201cthinly veiled xenophobia.\u201d Selkis also added: \u201cI\u2019m all for the stress test on deposits and think it\u2019s bad that such a high percentage of volumes runs through a single exchange. I also don\u2019t love the tone of some of the critiques. Sorry!\u201d<\/p>\n

Notably, on-chain analytics firm CryptoQuant recently conducted an analysis of Binance\u2019s reserves. The company\u2019s data shows that the amount of BTC Binance said it held as liabilities at the time the PoR report<\/a> was conducted is consistent with CryptoQuant\u2019s reserve data.<\/p>\n

Conclusion:<\/p>\n

Our analysis should not be interpreted as a favorable opinion of Binance as a company or the BSC\/BNB networks.<\/p>\n

Our data merely shows that the amount of BTC Binance says it holds as liabilities at the moment the PoR report was conducted matches our reserve data.<\/p>\n

\u2014 CryptoQuant.com (@cryptoquant_com) December 15, 2022<\/a><\/p>\n\n

Why Doesn\u2019t Binance Take A Big Four Auditor?<\/h2>\n

In Friday\u2019s much-discussed interview on CNBC, Binance CEO Changpeng Zhao said that \u201cBig Four\u201d auditing firms are currently unable to conduct an audit for a cryptocurrency exchange. The hosts then countered that Coinbase is working with Deloitte.<\/p>\n

Blockworks was told<\/a> today by a Binance spokesperson that the \u201cBig Four\u201d audit firms \u2013 famously Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers \u2013 are \u201cnot currently prepared\u201d to conduct a proof-of-reserves audit for a private crypto company.<\/p>\n

As reported by the news outlet, the spokesperson went on to say that Binance is going ahead with the Merkle tree proof of reserves to show that its assets exist on the blockchain. However, the exchange is still looking for a partner to verify the proof of reserves:<\/p>\n

We have reached out to multiple large firms [\u2026] and we are still looking for a firm who will do so.<\/strong><\/p>\n

At press time, the Bitcoin price was at $16,734.<\/p>","protected":false},"excerpt":{"rendered":"

<\/p>\n

Binance rumors were the all-dominant topic last week after the FOMC meeting. Rumors of insufficient proof of reserves and the pullback from accounting firm Mazars, allegations of a bank run and insolvency, as well as CZ\u2019s interview<\/a> on CNBC have dragged the Bitcoin and crypto sentiment and prices down.<\/p>\n

Charles Edwards of Capriole Investments pointed out in a Twitter thread that this \u201cFUD is really bad for the industry,\u201d pointing out that there is \u201cnothing\u201d backed by data that is legitimately worrisome, \u201cbut when fear is great enough, it doesn\u2019t matter.\u201d<\/p>\n

\u201cIf current withdrawal rates continue, expect more exchanges to go down \u2013 not from poor practices \u2013 but bankruptcy,\u201d Edwards contended.<\/p>\n

Is The Binance FUD \u201cThinly Veiled Xenophobia\u201d?<\/h2>\n

The analyst suggests<\/a> that all exchanges are being hit extremely hard by current market conditions. They have to deal with a price drop of more than 80%, a drop in trading volumes of more than 90% and a reduction of reserves by more than 50% \u201cdue to irrational panic.\u201d<\/p>\n

As Edwards analyzes, even the U.S. exchanges Coinbase, Gemini and Kraken have been hit badly. They are currently experiencing a 60% drop in their Bitcoin reserves over the past year.<\/p>\n

Addressing Bitcoin maxis, in particular, Edwards said:<\/p>\n

I love Bitcoin. But the maxis screaming for cold storage only, don\u2019t realize that if everyone actually went to cold storage, your precious Bitcoin price would approach $0. Influencers spreading FUD are literally damaging the industry & their net worth just to pump engagement.<\/strong><\/p>\n

At the same time, Edwards emphasized that his opinion on Bitcoin has not changed. He said the current price movement is largely fueled by panic. Still, Edwards spoke from the heart of many crypto enthusiasts when he turned to Changpeng Zhao and said:<\/p>\n

And CZ, let\u2019s stop dilly dallying and put this issue to bed with a _real_ audit.<\/strong><\/p>\n

Edwards was joined by market analyst Alex Kruger, who denounced the people who view bank runs as healthy stress tests. Those people \u201cclearly haven\u2019t thought this through. When funds leave, trading activity diminishes, and so do trading fees. And then, many funds never come back.\u201d<\/p>\n

Ryan Selkis, the founder of Messari, claimed<\/a> much of the Binance FUD is \u201cthinly veiled xenophobia.\u201d Selkis also added: \u201cI\u2019m all for the stress test on deposits and think it\u2019s bad that such a high percentage of volumes runs through a single exchange. I also don\u2019t love the tone of some of the critiques. Sorry!\u201d<\/p>\n

Notably, on-chain analytics firm CryptoQuant recently conducted an analysis of Binance\u2019s reserves. The company\u2019s data shows that the amount of BTC Binance said it held as liabilities at the time the PoR report<\/a> was conducted is consistent with CryptoQuant\u2019s reserve data.<\/p>\n

Conclusion:<\/p>\n

Our analysis should not be interpreted as a favorable opinion of Binance as a company or the BSC\/BNB networks.<\/p>\n

Our data merely shows that the amount of BTC Binance says it holds as liabilities at the moment the PoR report was conducted matches our reserve data.<\/p>\n

\u2014 CryptoQuant.com (@cryptoquant_com) December 15, 2022<\/a><\/p>\n

Why Doesn\u2019t Binance Take A Big Four Auditor?<\/h2>\n

In Friday\u2019s much-discussed interview on CNBC, Binance CEO Changpeng Zhao said that \u201cBig Four\u201d auditing firms are currently unable to conduct an audit for a cryptocurrency exchange. The hosts then countered that Coinbase is working with Deloitte.<\/p>\n

Blockworks was told<\/a> today by a Binance spokesperson that the \u201cBig Four\u201d audit firms \u2013 famously Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers \u2013 are \u201cnot currently prepared\u201d to conduct a proof-of-reserves audit for a private crypto company.<\/p>\n

As reported by the news outlet, the spokesperson went on to say that Binance is going ahead with the Merkle tree proof of reserves to show that its assets exist on the blockchain. However, the exchange is still looking for a partner to verify the proof of reserves:<\/p>\n

We have reached out to multiple large firms [\u2026] and we are still looking for a firm who will do so.<\/strong><\/p>\n

At press time, the Bitcoin price was at $16,734.<\/p>\n

<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"colormag_page_layout":"default_layout","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[82],"tags":[],"class_list":["post-14327","post","type-post","status-publish","format-standard","hentry","category-blockchain"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts\/14327","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/comments?post=14327"}],"version-history":[{"count":0,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts\/14327\/revisions"}],"wp:attachment":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/media?parent=14327"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/categories?post=14327"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/tags?post=14327"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}