Following on what happened to one of the leading crypto service providers, FTX, and the factors that led to its collapse, it is reported that the leading virtual asset exchange is alleged to have committed something similar to that of FTX.
The crypto exchange firm allegedly secretly transferred consumer funds valued at around two billion dollars while managing customer wallets. Moreover, after the previous year’s cryptocurrency crash, the firm allegedly moved the assets for its gain without the investors’ permission or consent.
The illegal transfer is speculated to have been initiated amid the collapse of FTX, between the collapse crypto firm co-founder and his associates such as Alameda Research. Thus, the consequences of such an action might be substantial for the crypto exchange platform and the crypto industry at large.
Binance Gambles with User Funds
As information published in the Forbes report alleged, hedge funds received a large sum worth 1.8 billion dollars in stablecoin securities from the exchange platform in the previous year.
The transfer benefited Alameda Research, a firm whose name has emerged more than once in the federal courts concerning a case filed by the SEC against the collapsed exchange company, FTX, and its executives.
Following these events it stirs tension and doubt among crypto traders and investors that utilize the platform daily, who witnessed and suffered losses due to the collapse of FTX in November of the previous year. The major reason for the transfer remains unknown and is yet to be discovered or made public.
In addition, it is alleged that the transfers were initiated between 17th August and the beginning of December of the previous year. When extreme attention is employed, the timing corresponds with the period when FTX was witnessing its collapse, which initially started with the speculations of illegal transfers by the company.
Binance chair Changpeng Zhao, who is purported to be active on social media, Twitter, has remained quiet ever since these speculations broke out and is yet to react about this entire situation.
Recently, Binance has been facing challenges; for instance, its relationship with Paxos, the company accountable for producing Binance native coin, was captured on the SEC’s radar. As a result, the SEC demanded Paxos bring its operations to a standstill, which currently is affecting the growth of the Binance stablecoin.
Furthermore, illegal transactions and exchanges by the leading crypto exchange platform might make it vulnerable and expose it to attacks from the SEC which might not be a very good idea considering that the SEC has extorted millions of dollars from its victims. And as it stands currently, Binance is in no position to withstand such pressure.
Coinbase Delists Binance USD
It comes as a shock to Binance when the leading crypto exchange platform in U.S. U.S has disclosed information about seizing the trading of Binance stablecoin seven days after Paxos was forced to stop operations and the production of the stablecoin. However, customers still have access and the option of liquidating the asset and converting it within the Binance platform at any time.
Coinbase has decided not to list tokens or assets that show signs or might become security by the Federal courts. However, it is worth noting that the SEC has relentlessly speculated that the firm has a habit of listing unauthorized securities.