Image courtesy of Binance Twitter page

• Binance reiterates in a blog post that it has a debt-free capital structure and is financially healthy. 
• CZ adds that FUD around Binance continues to exist for several reasons. 

Binance, the world’s largest crypto exchange by trading volume, has hit back at critics spreading fear, uncertainty, and doubt (also FUD) about it. Binance has stated that it is financially strong even as rumors emerge that the exchange may be negotiating with a tier-1 auditor and a huge investor.

In a recently published blog post to address all recent media and community queries, Binance highlighted each source of controversy and explained why they were untrue.

These include the USDC withdrawal pause, its reserve, and Mazars’ suspension of crypto-related audit work. It also addressed reports of a U.S. regulator’s investigation into Binance, and whether Binance played a role in FTX’s collapse.

According to Binance, the recent 8-hour pause of USDC withdrawals have nothing to do with liquidity troubles. Instead, it was because it was trying to perform a token swap that involved a traditional bank that was not closed due to time zone differences.

The exchange further explained that fears of its reserve being short of assets are unfounded as it backs user assets 1:1. Binance follows a simple business model, the post notes. This is to make profits by charging transaction fees to users. This means that it separates user assets from company assets and maintains a debt-free capital structure.

“Binance’s business model is very simple. The platform makes profits mainly by charging transaction fees. The company’s assets are completely separated from users’ managed assets. The capital structure is debt-free. Therefore, Binance’s financial status is very healthy,” the blog said.

It added that because of this, Binance has enough capital reserves to cover daily operations and survive any tough cycles. This is supported by insider information that was revealed by investor Mike Alfred. Alfred sources noted that Binance is in talks with a tier-1 auditor to take over from Mazars, and may also welcome a huge investor soon.

Clarification on other issues similarly throws light on massive media misconceptions and misrepresentations.

CZ highlights why Binance has been the target of coordinated FUD.

Meanwhile, Binance CEO Changpeng Zhao (CZ) shared reasons he considers to be why FUD around Binance continues to gain ground. Writing in a Twitter thread, he noted that Binance continues to get flack in the industry because some persons “hate centralization.”

He notes that this hate, for some, is even though CEXs have helped accelerate crypto adoption. Meanwhile, others have had experiences such as losing money trading on Binance or other issues that fuel their apathy. Still, others just generalize that all CEXs are bad after witnessing the collapse of one bad actor.

Another reason for Binance FUD he notes is that some industry players consider the exchange as competition. This makes them go overboard to sponsor media propaganda to malign the exchange. CZ also notes that Binance, being the one of biggest players in the industry,e is a prime target for propaganda. He wrote:

“Writing about “Binance” gets you more clicks. If you write about a small exchange, you get less clicks. Size has pros and cons.”