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Binance Woes Highlighted By Forbes

Steve Miley trader
Updated 10 Jan 2023

A recent report from Forbes has highlighted ongoing concerns at the world’s largest cryptocurrency exchange, Binance. In the wake of the collapse of FTX, investors and customers are right to be concerned.

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YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


Binance in the Spotlight

In an article by Forbes on Monday, the cryptocurrency spotlight was shone directly on the biggest cryptocurrency exchange on the planet, Binance. According to the report, in the wake of the collapse of rival exchange FTX in November, Binance is struggling to hold onto assets. The CEO of the crypto giant, Changpeng Zhao (commonly known as CZ) continues to assert that the situation had stabilized, however, the data seems to tell a different story. Despite the wider cryptocurrency market tentatively recovering over the past couple of months and into the start of 2023, the damage inflicted by the 2022 Crypto Winter leaves the whole digital assets and decentralised finance space extremely vulnerable and shaky into the start of the near year, 12 months since the start of the aggressive crypto sell-off.

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YOUR CAPITAL IS AT RISK. 68% OF RETAIL CFD ACCOUNTS LOSE MONEY

Customer Outflows a Concern

According to data from crypto data firm Defillama, Binance customers withdrew a net $360 million on Friday 6th November. This continues the negative stream of data that has been seen since the FTX implosion. Another crypto data firm, Nansen, tweeted back on 13th December that over the prior week, Binance had lost over $3 billion in assets.

This amounted to 4% of Binance’s total assets at that time. Moreover, the investigation by Forbes has indicated that since CZ tweeted that “Things seem to have stabilized” on 14th December, Binance has lost 15% of its assets and nearly a quarter of Binance assets have left the exchange in less than two months! Forbes stated that they had “reached out to Binance seeking comments for this story but did not receive a response by publication time.”

The Forbes article goes on into depth to look at discrepancies and difficulties in valuing and categorizing assets held inside crypto wallets, but the analysis does not look great for Binance.

Binance Coin (BNB) and Binance USD (BUSD) Continue to Fall

The lack of investor confidence in Binance is probably best indicated by the performance of the native tokens of the exchange, Binance Coin (BNB) and Binance USD (BUSD). According to the research by Forbes, Binance’s stock of BUSD stablecoins has fallen by 40% since 10th November, whilst BNB has fallen by 29% over the past two months, which leaves 29 million of the tokens on Binance. This is 51% fewer than the exchange announced on 10th November.

We are NOT implying that Binance is suffering the financial woes that the beleaguered FTX endured due to mismanagement and alleged fraud, but as we learned from the Global Financial Crisis back earlier this century, nobody is “too big to fail!”


YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


Steve has 29 years of financial market experience including 3 years at Credit Suisse and 15 years at Merril Lynch. Steve is the Academic Dean for The London School of Wealth Management and has won many awards from Technical Analyst Magazine.