Binance in the cross hairs

It's been a rough year in the crypto space. The turbulence in the ecosystem is apparently getting worse as it appears a devastating collapse is imminent. Many supposed giants have already fallen these past few months due to unscrupulous practices as well as mismanagement. These incidents have shaken the confidence of many in the future of cryptocurrencies.

Unfortunately it appears that another collapse may be in the works as Billion dollar centralised exchange is currently sailing in troubled waters with the Captain of the ship not succeeding in doing proper damage control to enable the ship ride out the storm.

What began with allegations of Binance being accused of haven played a role in the collapse of FTX exchange have now metamorphosed into the exchange coming under a barrage of more serious accusations from different quarters.

I came across an infographic which outlined the travails of Binance between 9 and 16Th December which gives room for much concern especially for those trading or storing their assets (which isn't the best in the first place) on the exchange.

Worst hit by these developments are those who have a substantial portion of their assets in BNB whose value has nose dived significantly in the past few days with some speculating that its value may go as low as 150 USD. I will highlight the key points in the infographic and provide additional information where possible below.

1. The US Department of Justice (DOJ) is contemplating filing criminal charges against Binance

It has been a cat and mouse game between Binance and US Authorities for quite some time. The US Authorities have had Binance on their radar for quite some time with Binance adopting different tactics to evade an actual stand off with them. However it appears Binance may now have run of tactics to deploy to avoid the confrontation with US Authorities with the DOJ poised to take action at any moment. The criminal allegations Binance is being accused of include fraudulent activity such as money laundering for criminal entities.

1. Mazars the firm which did an audit of Binance recently has halted proof of reserve activity for all crypto clients

What makes this really worrisome is that the firm didn't stop at ceasing conducting of audits, it also removed the proof or reserves audit it did for Binance from its website. This suggests that things didn't add up with the audit it did and it may well be covering up its own tracks to prevent it being liable from any fallout that could come from a false or doctored audit. You will recall that many in the crypto space had criticised Binance for adopting the unconventional Proof of reserves approach for its audit which didn't present a genuine picture of its actual financial status.

1. 8 billion USD worth of withdrawals within a week

2. Freezing of spot BNB borrow

3. Halting of ERC-20 USDC withdrawals

4. Large unexplainable BNB wallet balances as well as activity on Binance beacon chain

5. Abnormal activity in Binance perpetuals suggestive of manipulation

6. Kevin O'Leary accuses Binance of causing the collapse of FTX while appearing before the US Congress

7. Binance users account hacked through third party 3 Commas

8. Binance refuses to refund Mithril's 50 million USD of BNB after delisting with the former citing terms of service violations

9. 3 billion USD worth of chain swaps from TRC USDT to ERC USDT within same period which suggests mismatched assets or liabilities. Closely related to this are allegations Justin Sun, Jump and WinterMute are facilitating conversion of BUSD to USDC to enable customer withdrawals

Some have also commented that in his recent media appearances CZ didn't appear like his usual confident self but seemed somewhat jittery similar to SBF before the fall of FTX. These appraisals of CZ's countenance may be subjective but it's better to take appropriate counter measures considering the other events listed above which have happened within such a short time interval.

The slogan:

"not your keys , not your crypto "

is relevant now more than ever before considering what happened to user funds when FTX collapsed. If the same fate were to befall Binance , the consequences as well as the losses would be catastrophic, the likes of which we haven't seen before considering the high trading volume on Binance.

Thank you for reading and do stay safe out there .