Binance is the biggest exchange on the face of the earth, holding more than $60 billion in user funds
While answering a simple yes or no question from one of the users about the insolvency of Binance, CZ replied positively that Binance is insolvent
The investor sentiments of fear, doubt, and uncertainties have reached levels where they can threaten even the stable projects of a rug-pull.
Even though crypto markets are highly decentralized, the majority of the user holdings are stored in the exchange wallets. Binance is the biggest exchange on the face of the earth, holding more than $60 billion in user funds. However, a series of unforeseen events has led to mass withdrawals from Binance, causing damage of no less than $3.5 billion to the exchange.
Amidst this chaos, Twitter not only became the source of the latest market updates for the users but also a communication medium for Binance to make its voice heard amidst the massive FUD. Binance along with CZ has been hyperactive on the microblogging platform to ensure that no gap in communication between the users and the platform. Changpeng Zhao, aka CZ, founder & CEO of Binance Exchange has been vocal about the baseless fear and uncertainties and called out the users to keep building. CZ has claimed multiple times that Binance is financially strong enough to deal with such situations, naming them as the litmus test of trust.
However, the crypto world came to a halt when Binance CEO replied to a tweet with a ‘yes’.
While answering a simple yes or no question from one of the users about the insolvency of Binance, CZ replied positively that Binance is insolvent. This was the worst that could happen to the crypto markets at this point in time. This tweet by CZ started flowing within the community within minutes and created extreme panic among its users. However, CZ realized this grave mistake and corrected it as soon as he could. Replying to the same tweet, CZ said that he mistakenly read the question wrong and “of course, Binance is completely solvent”
This happened within minutes but the panic it created within the ecosystem had been terrible for the exchange.
The latest updates about the proof-of-reserves of Binance have been counterproductive as its auditor, Mazars, have halted its operations and ties with all of its clients. This has further complicated the attempts of trust that CZ is trying to bring back to the Binance community. Mistakes such as these force the users to read between the lines and withdraw their funds from the exchange.
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Also, Read - Binance Enjoys Unrivalled Market Dominance
