My Thoughts About the Upteenth Binance FUD

Is any month truly complete without its customary dose of Binance FUD? Month after month there’s at least one news or the other painting Binance and CZ in a bad light, or let me rephrase that, Binance is always roped into some awkward situation by the media at least once every Month.

And the most frustrating aspect? Most of these reports lack substantiated proof or credible evidence, and more often than not, they're later debunked. Perhaps it's high time Binance took a stance and sued someone for defamation just to set a precedent. But I digress.

Approximately 15 days ago, Binance was once again thrown into the spotlight when they suspended BTC withdrawals due to irregular gas fees from the Bitcoin network.This was supposedly caused by congestion from BRC-20 ordinals, which by the way, was in no way Binance's fault. Any large exchange in their shoes would have done the same

Fast rewind to the previous month, and we find rumors swirling around CZ and Binance. They were purportedly being sued by the CFTC over regulatory violations, insider trading, and secret in-house trading accounts.And the month before that, whispers of CZ's alleged illegal trading activities were doing the rounds, only to be later dismissed.

And now, today's slice of FUD pie – Binance is under fire once again. This time, it's because of a Reuters report suggesting that Binance had commingled billions worth of customer funds in 2020 and 2021.

The report cites three anonymous sources, one of whom claims to have insider knowledge of Binance's finances. The accusation? Binance allegedly used the now-defunct Silvergate Bank to blend customer funds with their own, to the tune of billions, almost daily.

But let's look closer. The report doesn't independently verify the figures or the frequency of the transactions. Moreover, there's no evidence suggesting that Binance lost the supposedly commingled funds or actually commingled funds at all. These accusations seem to be another case of creating smoke where there's no fire.

At the center of the controversy is Binance's stablecoin, Binance USD (BUSD). According to the report, BUSD was used to credit customers' accounts when they were actually depositing U.S. dollars. This led to a drop in BUSD's market capitalization from $16 billion to $5 billion after the SEC sent a Wells notice warning it intended to pursue litigation over "violating investor protection laws". Once again these are allegations, not facts.

And what do the former regulators say? They suggest that customers don't know where their funds are and hence are at risk, with no proof, not one, nor one person coming to say they lost funds…

So here we are, witnessing another episode of the Binance FUD saga. But let's not forget, Binance is no stranger to controversy. They've faced it head-on before, it’s become their monthly cup of tea, and I believe they will do so again.

It’s not easy being the largest exchange in the world, you’re subject to be under the microscope of regulators and FUDsters. So that doesn't mean we should believe every piece of news we come across. As CZ himself says, "In the face of adversity, stay #SAFU." And in the meantime, let's wait for the next month's FUD, shall we?

Thanks for reading…