‘They don’t know how an exchange works’

In the aftermath of the FTX collapse, Forbes published a article focused on the recent “shuffling” of funds by the cryptocurrency exchange Binance.

However, the following day on Feb. 28, Binance co-founder and CEO Changpeng “CZ” Zhao took to Twitter to respond. In response to the article, which he called “FUD,” the CEO said:

“They seem to not understand the basics of how an exchange works. Our users are free to withdraw their assets any time they want.”

In his series of tweets, he addressed various claims from the Forbes article. This included a “backroom maneuver” when Binance transferred $1.8 billion in stablecoin collateral to hedge funds such as Tron, Amber Group and Alameda Research between August and December 2022.

They called out Tron, Amber group, Alameda Research, etc. They seem to not understand the basics of how an exchange works. Our users are free to withdraw their assets any time they want. Their withdrawals are turned into “received hundreds of millions of shifted collateral.” 2/
— CZ Binance (@cz_binance) February 28, 2023

In light of the movement of funds, the article drew parallels between Binance and the now-defunct FTX in the lead-up to its demise. It also touched on the recent failed Voyager bid by Binance.US and the United States Securities and Exchange Commission’s planned legal action against Paxos Trust Company — the issuer of the Binance-branded stablecoin, Binance USD (BUSD).

On Feb. 10, 2022, Forbes announced that Binance would take a $200 million stake in the company as a strategic investment.

However, in June 2022, in a follow-up report from Bloomberg, CZ said the company’s investment agreement is “changing” after Forbes’ deal to go public fell through. In light of the article, there has been no update on the situation.

However, in response to CZ, one Twitter user suggested he buy Forbes and “delete it,” to which CZ said, “not worth it.”

The article from Forbes comes after the New York Department of Financial Services (NYDFS) ordered the blockchain company Paxos Trust Company to terminate its issuance of BUSD.

On Feb. 13, it officially announced it would no longer mint the stablecoins while giving them a redemption period until February 2024. Binance says it still supports BUSD and is now looking into non-USD stablecoins.