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- The latest Reuter report accuses Binance of hiding details of its core business – Binance.com – from public view.
- Despite criticism, Binance makes key acquisitions spending over $1 billion to acquire assets of Voyager Digital.
After the dramatic collapse of the crypto exchange FTX, all eyes are now on crypto giant Binance. This month, crypto exchange Binance faced turbulence with over $7 billion in withdrawals just in a matter of three days.
Also, questions arose on Binance’s financial health with many questioning the exchange’s Proof-of-Reserves report. Last Friday itself, Binance auditing partner Mazars Group decide to cut ties with the exchange.
With all these developments in line, the crypto community is questioning whether Binance is following the FTX route. So far, Binance has handled withdrawals well and said that they are in a comfortable position financially.
On Monday, December 19, Reuters published a detailed report stating that Binance’s books are a black box. Reuters accused crypto exchange Binance of hiding details of its core business from public view. The public also noted that Binance has been actively avoiding oversight of its platform. They added:
Binance declines to say where Binance.com is based. It doesn’t disclose basic financial information such as revenue, profit and cash reserves. The company has its own crypto coin, but doesn’t reveal what role it plays on its balance sheet.
It lends customers money against their crypto assets and lets them trade on margin, with borrowed funds. But it doesn’t detail how big those bets are, how exposed Binance is to that risk, or the full extent of its reserves to finance withdrawals.
The U.S. Department of Justice (DoJ) and other regulators are investigating Binance over charges of money laundering and sanction violations.
Binance Acquires Voyager Digital and Tokyo Crypto
Despite several fingers pointed at Binance, the crypto exchange continues to expand its footprint in the market. On Monday, Binance US announced the purchase of assets of bankrupt crypto lender Voyager Digital for $1.022 billion. Binance chief Changpeng Zhao already announced last month that the crypto exchange is willing to make a fresh bid for Voyager’s assets.
In a statement on Monday, voyager said: “The Binance.US bid aims to return crypto to customers in kind, in accordance with court-approved disbursements and platform capabilities”. As part of the deal, Binance US will make a $10 million good-faith deposit and would reimburse Voyager for certain expenses up to $15 million. In a hearing on January 5, 2023, Voyager Digital will also seek the approval of the bankruptcy court.
In another major development, Binance acquired the Indonesian crypto exchange Tokyocrypto. Currently, binance has become the majority shareholder of the exchange. However, it plans to acquire all of Tokyocrypto’s shares over a period of time.
This would allow Binance to legally operate in Indonesia under the regulatory permit of the Commodity Futures Trading Regulatory Agency (BAPPEBTI). Pang Xue Kai, founder and former CEO of Tokyocrypto said:
Tokocrypto came from our idea more than four years ago and I am very proud to see every growth, achievement and contribution that the company has made to advance Indonesia’s digital economy.
