Binance CEO Changpeng Zhao was grilled by CNBC reporters regarding hiccups with withdrawals from the exchange this week and the firm’s solvency.
Binance earlier this week temporarily paused withdrawals of the USD Coin stablecoin due to inadequate USDC reserves on the platform. Zhao said the issue was related to a New York bank it uses to swap Paxos-issued BUSD holdings into USDC not being open at the time.
“We have the assets to convert,” Zhao said. “There’s no margin, there’s no leverage, we just needed the banks to open. When banks are closed and you try to withdraw money it doesn’t work.”
Zhao said Binance owes money to no one, doesn’t have venture capital investments and has no loans.
“We manage our cash very simply,” the CEO said.
“Just because bitten by one snake doesn’t mean any other animal is the same,” he said, referring to the downfall of Sam Bankman-Fried’s FTX.
He defended the company’s EARN program, saying the customer money there is used for other margin traders to borrow from and “sometimes we do run out because the demand supply some time don’t match up but the money never leave the platform and we do margin controls.”
He also insisted that his industry is more transparent than most traditional businesses, and he wants to set the gold standard for reliability.
“In our industry we don’t depend that much on trust we depend very much on verification.”
Pushed to answer whether Binance could afford to pay back $2.1 billion that it received from its exit from FTX last year, Zhao said, “We’re financially strong. We’ll let the lawyers handle it.”
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