The FTX fiasco does not appear to settle so soon as the aftermaths of the collapse appear pretty huge than expected. It started with Binance letting off all the FTT tokens worth more than $500 million, which ignited a fresh FTT price plunge. After creating a ripple of fallouts with Genesis, BlockFi, etc, now the wave has stuck back to Binance. No sooner had it halted the USDC withdrawals, than the ‘Binance FUD’ began to circulate.
Traders began withdrawing from Binance as part of previous incidents with Terra and FTX. Furthermore, the proof-of-reserves that was promoted by Binance CEO, CZ to maintain transparency, also backfired on the platform as auditors claimed that the report was not satisfactory. This affected the price of the native coin BNB, which is trading below $300 with a massive decline of around 25% over the past few days, marking a low of $220.
The markets have turned extremely bearish over Binance right now which was multiplied by the Fed Chair’s hawkishness and ongoing SBF trail. Due to this, the traders have expressed their desire to sell as huge negative mentions w.r.t Binance prevailed, socially. This is enough to keep the markets consolidated or captivated for a prolonged period.
Binance Under-Reported BTC Holdings
After the FTX debacle, Binance was the one that promoted the introduction of proof-of-reserve on exchanges. After Binance, almost all the exchanges also displayed their respective PoRs to be transparent and regain the trust of the traders.
However, Mazars, the firm which audited Binance, initially raised concerns over Binance’s PoR report and later stopped auditing the other crypto platforms like KuCoin, CryptoCom, etc, creating a fresh wave of FUD.
According to a new report by Glassnode, there is a huge difference between the Binance exchange balance and the balance reported in POR.
As per Glassnode, the balance on the Binance exchange displays a total of 584,600 BTC but the platform reported 359,300 BTC in its PoR. Considering this report, there is a huge difference of more than 200K BTC worth nearly $3.4 billion at the moment. Meanwhile, the Ethereum reserves accurately display 4.65 million ETH held.
Many crypto influencers believe that Binance FUD is being circulated to recreate the FTX failure as the platform is processing withdrawals without delay. On the contrary, the confidence of the traders seems to have been shaken as the platform has registered heavy outflows recently. While Binance CEO, CZ, is trying his level best to quell the FUD being spread on the platform, BNB price continues to slide heavily.
