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On Thursday, the Chief Executive Officer of Binance, Changpeng Zhao, who’s popularly referred to as “CZ”, was questioned about the exchange’s insolvency & the withdrawal difficulties faced this week, during an ongoing TV interview. The CEO came out in defense of his platform, citing that they are financially stable and better off than any other exchange in the industry.
Binance’s Withdrawal Woes
Earlier this week, due to an insufficient amount of USD Coin (USDC) reserves on the Binance platform, the stablecoin withdrawal process got momentarily halted.
Read More: Binance CEO CZ – “Things Have Stabilized, Deposits Are Coming Back In”
Zhao states that the problem was caused due to a bank based out of New York, which the company utilizes to exchange Paxos-issued BUSD holdings into USDC, being closed at that moment of time.
CZ was quoted saying,
We have the assets to convert. And, there’s no margin, there’s no leverage, we just needed the banks to open. When banks are closed and you try to withdraw money it doesn’t work.
A Solid Balance Sheet?
He further states that the Binance company doesn’t owe money to anyone and is devoid of any sort of venture capital investments or loans.
Read More: What Is The Share Of Recent Binance Withdrawals Out Of Total Assets?
Taking a dig at Sam Bankman-Fried and the whole FTX fiasco, Zhao added that “Just because bitten by one snake doesn’t mean any other animal is the same.”
Binance’s Earn Program
While speaking about the exchange’s “Earn” program, he defended it by claiming that the client funds are used as a source of credit for other margin traders.
CZ also admitted to the fact that the crypto exchange occasionally runs out of funds because of the demand and supply constraint, however, those funds never leave the crypto platform. He also emphasized on their constant monitoring of the situation with frequent margin controls.
Read More: Binance Responds To Allegations, Denies Reports On Money Laundering
When asked if Binance could afford to repay the $2.1 billion it earned from leaving FTX last year, Zhao responded, “Our finances are sound. The legal team will handle it.”
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