A shocking disclosure revealed that Binance, the biggest cryptocurrency exchange in the world, has handled user funds similarly to FTX. Recent allegations state that following the cryptocurrency meltdown in 2022, the exchange transferred $1.8 billion in user money without authorization for its own use. Unauthorized user asset transfers between Sam Bankman-Fried enterprises, including Alameda Research, were at the heart of the FTX bankruptcy. So, these accusations may be devastating for both the crypto industry and the exchange.
Has Binance Reorganized User Assets?
According to a Forbes story, the exchange transferred $1.8 billion in stablecoin collateral to hedge funds in 2022. Alameda Research is among the recipients of the transactions, which may cause concern among cryptocurrency traders who suffered the most from the agonising fall in November 2022. According to the study, the transfers' intended use remains unknown. According to reports, the moves will occur between August 17, 2022, and early December 2022. The FTX collapse, which started after the announcement of its illicit crypto transactions, also happened around this time.
The CEO of Binance, CZ, has not yet commented on the situation despite being fairly active on Twitter. When the SEC recently raised concerns about Paxos' issuance of the Binance USD (BUSD) stablecoin, the exchange was also a hot topic of discussion. Due to the regulatory action, Paxos stopped issuing new BUSD. Hence, similar transactions and behaviours to FTX would put additional regulatory pressure on cryptocurrency exchanges. In this instance, Binance cannot afford to have regulatory pressure put on it because it is the largest exchange in the crypto community.