Binance Secretly Moved $1 Bln User Assets Just Like FTX: Forbes

Binance FTX News: In a sensational revelation, it is reported that Binance, the world’s largest cryptocurrency exchange, had done something similar to FTX while handling user assets. According to latest reports, the exchange  had without any permission transferred for its own purposes $1.8 billion in user assets, after the crypto crash in 2022. At the center of the FTX collapse was the unauthorized transfer of user assets between the Sam Bankman-Fried companies including Alameda Research. Hence, these allegations could prove to be fatal for not just the exchange but also for the crypto market.

Also Read: Coinbase To Suspend Binance’s BUSD After Internal Review

Binance Shuffled User Assets?

According to the Forbes report, the exchange had in 2022 transferred $1.8 billion in stablecoin collateral to hedge funds. The beneficiaries of the transfers also includes Alameda Research, which could ring a bell of alarm in the minds of crypto traders, who bore the brunt of the painful crypto crash in November 2022. The purpose the transfers is undisclosed, the report said. The transfers are said to be made between August 17, 2022 and early December 2022. This time period also coincided with the FTX collapse, that began with the news of its unauthorized crypto transfers.

Binance CEO CZ, who is quite actively engaged on Twitter, is yet to respond on the matter. The exchange was also a subject of debate recently when the SEC found fault with Paxos’ issuance of Binance USD (BUSD) stablecoin. The regulatory action led to Paxos discontinuing the new issuance of BUSD. Hence, transactions and activities similar to FTX would invite further regulatory pressure on crypto exchanges. In this case, being the largest exchange in crypto ecosystem, Binance cannot afford to have regulatory pressures come its way.

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Also, a big chunk of traders preferred to move assets to Binance last year amid fears of FTX related contagion catching up with other centralized exchanges. If not for the trust among traders, the exchange holds the distinction of being looked at as a robust player.