You are currently viewing 🚨Breaking: Is Binance falling to zero!?  |  by White Hat Crypto |  Coinmonks |  Dec, 2022

🚨Breaking: Is Binance falling to zero!? | by White Hat Crypto | Coinmonks | Dec, 2022

The shifting dynamics and FUD have raised many concerns regarding Binance’s stability!

Breaking: Is Binance falling to zero?

Changpeng Zhao appeared to be the unchallenged ruler of cryptocurrency just a month ago. In early November, the revolutionary exchange FTX crumbled catastrophically, and Zhao, the CEO of Binance, fired the fatal shot by selling FTX’s native cryptocurrency, sparking a liquidity crisis that sunk FTX and its founder and CEO, Sam Bankman-Fried.

For a few days, it seems that Binance might buy FTX. In the weeks afterward, FTX’s chaotic collapse threatened to tip an already pressured crypto sector over the edge.

Prosecutors and regulators have claimed that FTX was not simply a failing firm, but a major scam and Bankman-Fried was detained in the Bahamas on Monday.

The FTX crisis has also seeded considerable skepticism among crypto survivors, who are waiting to see which big company falls next and whether one of them is. Binance.

Binance is the world’s largest cryptocurrency exchange in terms of volume. However, the company has had regulatory issues and is facing potential criminal charges for money laundering and sanctions breaches.

Copy trading bots from the top traders. Try it for FREE.

Customers with draw billions of dollars in assets from the company’s platform this week, and Binance momentarily blocked withdrawals of a critical asset. Other cryptocurrency firms arranged crisis meetings to discuss how they would respond if Binance’s situation deteriorated.

So, how deep is it Binance in chaos? Insiders say it’s not as awful as FTX, but it’s still not ideal.

Senior executives at many other well-known crypto businesses, including Binance’s main competitors, told Fortune that they do not feel Binance is on the verge of collapse, a view supported by blockchain data showing the company has enough reserves of Bitcoin and liquid assets. While some casual spectators have made comparisons between Binance and FTX, many in the business are not.

Zhao said this week that the firm and cryptocurrency, in general, are going through a rough patch. He stated in a memo to staff that the crypto sector is going through ahistoric momentand that the coming few months would bebumpy’ but that Binance’will survive any crypto winter.

However, the platform and its CEO are under tremendous scrutiny, and in the next few months, it will be decided if Binance has a long-term existence.

While the focus of this week’s news cycle has been on Bankman-Fried and crypto-related hearings in Washington, DC, a new drama regarding Binance has been playing out slowly in the background.

It all started when the analytics firm Nansen released data showing that clients took out $3.6 billion in assets from Binance over seven days, including over $2 billion in a single day!

The withdrawals were most likely prompted by a story published on Monday alleging that groups within the Justice Department are pushing hard to seek criminal charges against Binance and its CEO for sanctions breaches and money laundering.

Because the Nansen data covers withdrawals of Ethereum and stablecoins but not Bitcoin, the true scale of the outflows may have been more than reported!

An executive at a Binance competitor, who asked to remain anonymous because he was not allowed to speak publicly, told Fortune that his company’s internal estimates show that total outflows could have been as high as $6 billion to $8 billionincluding Bitcoin and other currencies like Tron cash-outs.

Concerns about Binance grew after reports that the business was unable to process payouts of USDC, one of the most popular stablecoins tied to the US dollar. According to the executive at the competitor business, this is part of what made it seem necessary to plan out the worst-case scenarios involving Binance.

That worst-case scenario may ring a bell: It is speculated that Binance may be utilized BNB, a coin native to Binance’s own blockchain, as a loan collateral. Binance rejects this approach, but if accurate, it might expose the corporation in the same manner as FTX’s FTT coin did. If the market becomes concerned about Binance’s viability, the value of BNB might collapse, leaving Binance unable to repay debts and forcing it to dump its holdings of the controversial stablecoin Tether. This, in turn, might cause Tetherwhose reserve structure has always been unclear, to fail to maintain its $1 peg, igniting a wide wildfire across the crypto markets.

What do you think about this situation?

I hope you find this blog helpful. Be cautious when investing in and learning about the cryptocurrency sector. If you enjoy the content, please consider following me!

Leave a Reply