After the collapse of FTX, Binance creates a monopoly in the crypto industry.
The crypto community criticizes the platform in numerous ways, although CZ claims the platform is financially strong.
Experts believe that if one player controls a considerable amount of volume, then there are multiple systematic concerns.
Trust in the platform. As a result, Binance has witnessed an enormous spike in trading volume after the fallout of FTX.
Currently, Binance is the most preferable centralized crypto exchange for trading digital assets. The exchange not just making profits in these hard times, but launches several initiatives to help the broader crypto market to recover.
Experts believe that all this clearly indicates that Binance is creating a monopoly in the crypto industry. However, the platform has also received criticism from the community as a result of enormous unwanted withdrawals, the temporary suspension of the USDC stablecoin, and its failure to reassure proof of reserve.
Furthermore, international accounting firm Mazars also stopped validating Binance's proof of reserves. This move by Mazars has sparked concerns in the crypto community about the viability of the crypto exchange Binance.
In a recent interview with an American media outlet, Binance CEO CZ reassured the crypto community about the platform's viability, saying the platform is too big to fail.
This is not the first time CZ has appeared in an interview and assured the world about the platform; he has made multiple claims in the last month. Recently, CZ pointed out that Binance has a longer track record than FTX in the crypto industry and has previously survived a crypto winter in 2017-18.
However, concerns over Binance's proof of reserve is mounting day by day. A Binance spokesperson yesterday also reaffirmed that all assets on the platform are backed 1:1. He also stated that Binance will never utilize user funds for their own purposes and that user funds are quite safe on the platform.
These assertions from Binance clearly indicate that the platform intends to retain its top position in the crypto industry while also expanding its reach.
It is evident that a platform can alter the market's momentum to suit its needs if it controls the highest percentage of the trading volume. This is also evident in the cryptocurrency market right now, with Binance controlling the maximum percentage of the trading volume.
In line with this, Mark Lurie, CEO and co-founder of Shipyard Software, which creates decentralized exchanges, said: “I don't believe Binance intends to cause problems, but the company is now a risk to all of us. There are numerous systematic risks if one player controls a significant amount of volume.”
Tennessee Senator Bill Hagerty also stated that an FTX-like implosion of Binance would be catastrophic for the cryptocurrency sector, as well as for all users who rely on the industry.
However, CZ assured the crypto community that the exchange is financially strong and that any market turbulence or liquidity crisis will be manageable for the platform.
What do you think, is Binance creating a monopoly in the cryptocurrency market? Do you think Binance will experience a liquidity crisis in the near future? Share your thoughts in the comment section below.
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