With all the obstacles in the crypto market today, is it really possible that Binance suffers the same fate as FTX, Celsius, Voyager, BlockFi, Vauld, Hodlnaut, Three Arrows Capital, Alameda Research and others? Today, the country’s largest cryptocurrency company, Binance, is under fire. Fears are rising that the Binance empire may be on shaky foundations. Are these false accusations? Or is this another corporation that will fail? Several events have left investors wary of Binance’s credibility. CZ recently buried FTX after correctly identifying the risk of ownership of FTT tokens. In response, investors want to see evidence of funds. Ironically, CZ was the voice that asked for this. Binance then released the audit and the inspection results do not reassure or embarrass investors. On the other hand, investors started withdrawing their funds from Binance. As a result, over $3 billion worth of cryptocurrencies were removed in one day.
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Binance does not help your case.
Another negative point for Binance is the decision to stop USDC withdrawals from the platform. There is no faster way to destroy trust than preventing customers from withdrawing funds, especially USDC, which is considered one of the safest crypto assets. Binance claims this is due to a token exchange. However, this action should not lead any investor with Binance funds to trust the platform.
Because that’s a false accusation.
Fear and confidence in brokerages is currently at its lowest level in the past 5 years. Investors note that there is no compelling reason to hold their assets on a centralized platform. So why should I take a chance on Binance if I’ve already lost to assets on FTX, Twin Earn, Celsius, Voyager or any other doomed platform?
BNB and FTT
There is little chance that Binance will end up like FTX and other doomed centralized cryptocurrency platforms. First, Binance saw more withdrawals after the collapse of Luna and FTX. Today, Binance even says that deposits are making a comeback. Second, BNB tokens will not be destroyed. If the crypto community loses trust in Binance, the BNB token will be hit hard. However, we’re still waiting to see how that plays out. Ironically, BNB outperformed both ETH and BTC in this bear market, falling just 61% below its all-time high. At the same time, it should be noted that the FTT token was working fine until the fraud was revealed. The FTT token has no real use outside of the FTX exchange, while BNB is Binance Smart Chain’s native token, transactions still take place on the BSC as usual.
Conclusion
Ironically, centralized investors are the most vulnerable. It would be wrong to say that Binance cannot crash like FTX. But Binance has better leadership, a stronger balance sheet and less counterparty risk than FTX. For now, this is nothing more than coordinated FUD to undermine crypto market sentiment. Centralized exchanges are a current necessary evil. But we are waiting for the regulation to allow investors to gain direct access to crypto assets via DeFi.
Notice: The text presented in this column does not necessarily reflect the opinion of CriptoFácil. Read also: Coinbase launches return system for ERC-20 tokens sent by mistake Read also: Donald Trump’s NFT collection sells out and generates revenues of more than R$ 22 million