Reuters Reports: Binance Financial Books Remain Shrouded in Mystery as Company Tries to Rally Confidence

UTC by Tolu Ajiboye · 3 min read
Reuters Reports: Binance Financial Books Remain Shrouded in Mystery as Company Tries to Rally Confidence
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A recent Reuters article claims that the ‘books’ of prominent exchange Binance are opaque and disingenuous. But is it really so?

For several days, Binance has been battling to shore up investor confidence following a steep decline in its Binance Coin (BNB) native token. In addition, the world’s largest crypto exchange is also trying to dig itself out of the rubble caused by mass customer withdrawals in recent days. Binance’s current predicament is a callback to the turn of events that sank FTX. Moreover, amid Binance’s struggles, a recent Reuters article probed into the company’s financial and operational affairs with questionable intent. Basing its coverage of the Binance situation on filings, the Reuters article describes the company’s books as a “black box.”

The Reuters article, which takes a perceptibly aggressive stance, recapped Binance’s massive $6 billion net outflow over 3 days last week. At the time, the leading crypto exchange reportedly handled this mammoth transaction without glitches and pledged to embrace transparency following FTX’s collapse. However, the featured Reuters article also reported that recent Binance corporate filings discredit the company’s promise of transparency. According to the report, the Changpeng Zhao-led exchange has processed trades above $22 trillion this year. In addition, these trades remain mostly hidden from the public.

Binance Books Draw Criticism for Alleged Opaqueness

Furthermore, other criticisms levied at Binance include the company’s failure to disclose the physical location of and basic financial information. The author of the featured report also alleged that Binance does not reveal what role its BNB Coin plays on its balance sheet. In addition, although the exchange facilitates customer loans against their crypto assets and allows margin trading, it is not transparent on the receiving end of such activities. These include revealing the size of the bets, Binance’s exposure to such risks, or the adequacy of reserves to finance withdrawals.

However, Binance is under no obligation to publish detailed financial reports because it is not a public company like US rival Coinbase. Furthermore, because Binance has reportedly not generated outside capital in four years, it has not had to share financial info with external investors.

Regardless, Reuters claims that Binance intentionally remains shrouded in secrecy, especially from US regulatory scrutiny. Zhao actively sought to obscure the company’s primary operation from the US by establishing a new American exchange. Although the CEO denied these allegations, Reuters cited company messages and interviews with numerous former Binance associates as proof. Commenting on Binance’s approach to its financial situation, former SEC Office of Internet Enforcement head John Reed Stark said:

“They are co-opting the nomenclature of regulation to create a veneer of legitimacy. There is absolutely no transparency, no sunlight, no confirmation of any kind about its financial position.”

Amid the implied insincerity of the Binance financial books and its “black” façade, the Reuters report also stated that the company is under investigation. The US Department of Justice is probing the leading crypto exchange for money laundering and violations of sanctions. The report further stated that some prosecutors already have ample evidence to charge Binance and its top executives.

Altcoin News, Binance News, Blockchain News, Business News, Cryptocurrency news
Tolu Ajiboye
Author Tolu Ajiboye

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.

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