Is Binance on the Edge of Collapse?
Binance-Binance-Binance. It has been a difficult year for this crypto exchange, with some accusing it of being a hotbed of crime. Now, the rumors are that it could soon follow in the footsteps of FTX.
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Not everything looks glossy in Binance’s ‘kingdom’ these days. Following the FTX’s collapse, and the major role of Binance, in the market’s meltdown, some are wondering whether this crypto exchange is the next to fall, according to Fortune.
This year, several investigations showed that Binance’s practices are far from impeccable, but, according to insiders, there’s more to it as the company could soon be scrutinized by U.S. authorities.
Per the reports, the Justice Department is pushing aggressively to file criminal charges related to sanctions violations and money laundering against Binance and its CEO – an endeavor that has already purportedly resulted in mass withdrawals.
Recently, the analytics firm Nansen claimed that customers cashed out around $3.6 billion worth of assets over seven days from Binance – or even higher as the Nansen data includes withdrawals of Ethereum and stablecoins but not Bitcoin.
Some speculate that the real number hovers at $6 billion to $8 billion, including cash-outs of Bitcoin and crypto like Tron.
Though some believe that these reports are overblown, there is also a concern that the company was failing to process withdrawals of USDC. Rumors also persist that Binance could be using its native token BNB as collateral for loans, which means that the exchange might find itself on the brink of a collapse and unable to pay back loans.
On top of this, earlier this week, in an attempt to ensure that the funds are safe, Binance published an audit by the South African branch of global firm Mazars, with critics claiming that it was “woefully incomplete” and even “worthless”.
All in all, even if Binance does not immediately collapse and survives through the crypto winter and all the legal hassle, the company’s offshore operations and large volumes of cash floating across its platform have reportedly become too big for regulators to ignore.
They got so big they had no choice but to go legal,” the Fortune reports, citing an individual.
Previously, GNcrypto reported about the story of unlove between FTX and Binance.
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