Binance's CZ Slams Reports Binance's Reserves Are Full of Its Own Tokens

An anonymous reader quotes a report from Benzinga: Binance CEO Changpeng Zhao on Friday came down heavily on a report the cryptocurrency exchange holds $74.6 billion in tokens, out of which nearly 40% are its own stablecoin BUSD and native coin BNB. Sharing data provided by blockchain analytics firm provided by Nansen, the Bloomberg report said about $23 billion of the $74.6 billion net worth is in the company's own stablecoin BUSD and $6.4 billion was in its own cryptocurrency, BNB. According to Nansen data, the exchange has also allocated 10.5% of its holdings to Bitcoin and 9.8% to Ether.

Challenging the report, Zhao, popularly known as "CZ" in the crypto industry, said: "#BUSD is issued by Paxos, an NYDFS regulated entity, not Binance. The numbers are all wrong too. These are users' assets, in the form users choose to store with us. We don't convert for them." According to data shared by Binance, it holds around 475,000 Bitcoin ($7.8 billion), 4.8 million Ether ($5.57 billion), 17.6 billion USDT ($607 million), as well as close to 21.7 billion of its own stablecoin BUSD (worth $21.9 billion) and 58 million of its BNB tokens (worth $16 billion). The current value of these tokens is about $72.3 billion, according to Nansen.

Only worth 78 billion USD if

[hdyoung]

Someone else will buy it for 78 billion USD. I’ll buy their cryptocurrency for 78 billion of my totallyforrealsiescryptostablecoins. Freshly minted 5 minutes ago.

Crypto industry facin crisis

[quonset]

CZ was at a conference in Indonesia where he said the industry must look to regulation [cnn.com] and acknowledged it is currently facing a 2008 scenario.

“We’ve just seen another very big player going down,” said Zhao, who noted this collapse follows the downfall of Celsius, Voyager, Three Arrows Capital and other crypto firms.

Zhao was a key player in the downfall of FTX. Binance reached a tentative rescue deal with FTX earlier this week, but that transaction almost immediately fell apart, paving the way for Friday’s bankruptcy filing and the resignation of FTX founder Sam Bankman-Fried.

The moderator noted the crypto turmoil feels much like the 2008 global financial crisis, which brought down Bear Stearns, Lehman Brothers and other leading Wall Street players.

“That’s probably an accurate analogy,” Zhao said.

He urged regulators to look beyond just anti-money laundering and know-your-customer (KYC) rules and focus instead on the operations, business models and reserves of exchanges like FTX.

“Regulators, rightfully, will scrutinize this industry much, much harder, which is probably a good thing to be honest,” Zhao said. “Short-term, it’s very painful for retail investorsWe feel that pain. But longer-term, this is another wakeup call to say, ‘Look, we are in a new industry. There are a lot of risks and we need to learn how to deal with these risks.”

Re:Crypto industry facin crisis

[rsilvergun]

It can't survive regulation. Regulation means scrutiny on money laundering and securities fraud. Those two things form the backbone of the cryptocurrency market with the only other thing bringing any real money in being greater full speculators. About that illegal activity it immediately knocks 10 to 15K off the price of Bitcoin and with it everything else collapses. It goes back to being a rather silly curiosity obsessed over by the kind of people who dream of owning a country from an old oil rig

Re:

[gweihir]

No, they cannot survive regulation. They simply do not have even the basics, like reliable identification of all customers, ample real reserves, quite high IT security, archiving and auditing requirements, and so on. They will get regulation though and nothing of value will be lost.

Re: Crypto industry facin crisis

[ngb25]

They have this already. Some countries have already regulated and require all these things already. They are fine.

Re:

[macker]

""... we need to learn how to deal with these risks.”

*AFTER* taking in billions of dollars of investor funds?

STEP 1: Take billions of $$$
STEP 2: $$PROFIT from rampant greed and stupidity$$
STEP 3: Learn how to deal with the risks.

So, they are now at step 2.5 ?

Re: Crypto industry facin crisis

[dbialac]

It was all more or less a pyramid scheme to begin with, so there never was a step 3. Maybe now we stop using the electricity that was being used to create it in the first place and help reduce the effects of climate change.

You tell them!

[Arethan]

Those reserves are full of other tokens!
REAL tokens! Pinned against real fugazi!

I hope he enjoyed his glass empire while it lasted.

https://www.youtube.com/watch?... [youtube.com]

Re:You tell them!

[rsilvergun]

It's a Ponzi scheme so the guys at the top will make out okay. They've been paying themselves fat salaries and consulting these and squirreling away fiat currency this whole time. There's a handful of true believers who might get screwed but none of these guys count

Re:

[locofungus]

Hopefully they're matching assets to liabilities. If your customers have BTC deposited and you hold matching BTC reserves then you don't care what the price does, you just pocket the fees when they transact.

Re: You tell them!

[Jacamoo]

Exactly, these are representative of consumer assets, just held in more stable alternatives

Yumm...

[thragnet]

Self-licking ice-cream cone

The surprising thing to me is how high it went

[stabiesoft]

I've seen stories the totals for crypto reached 1T. Now I don't know if that is how much people actually paid for some numbers or if it is more like unicorns where there are 1M shares issued to a venture fund for 1% of the company for say 1M (buck a share) and then the company is now valued at 100M. Anyone know which it is? If they really found 1T worth of rubes that is amazing.

Re:

[ceoyoyo]

Nobody paid a trillion dollars for crypto. A whole bunch of it (the vast majority?) was mined, minted or otherwise by early adopters. A good chunk of that is (everyone hopes) forever inaccessible because it's been lost or purposely abandoned like Satoshi's hoard of bitcoin.

Re:

[gweihir]

Because it is all hot air, you can blow it up as much as desired....

Re:

[Opportunist]

Valued at a trillion means jack. I have here a piece of pocket lint valued at a billion. I have just found another one, so I now have pocket lint for the combined value of two trillions. And that's true all the way ... until I want to actually convert it to real money. Until then, you can value it at whatever value you feel like.

The actual value of an item is what someone else is willing to pay for it. And that only gets realized the very moment this happens. You have a lot of incorrectly evaluated stuff on

Re:

[stabiesoft]

Yes I know as I pointed out in my example of venture fund valuation of a startup. In my example 1M of real money ended up valuing the company at 100M. But how much real money (I know I am offending the crypto people when I use the word real money) went into FTX. I am aware of 95M from the toronto teachers pension that is real money that went poof. How much more? I'd also read the T Brady lost some, but the article was sketchy on details. All he was confirmed to lose was the coins he was given in exchange fo

It's literally data provided

[rsilvergun]

By a company that makes its money off the crypto markets. If they had pulled in a well-respected independent financial auditing company that would be one thing but they literally got their data from a company that ceases to be if the cryptocurrency market collapses. They don't just have a vested interest in making sure binance doesn't collapse their survival literally depends on it.

I'm just glad the whole thing is collapsing before it was integrated into the broader economy. It was painfully obvious Wall Street was hoping to do 2008 style derivatives using cryptocurrency is backing instead of mortgages. I can't even fathom the scale of a market crash that would based on pretend money and Ponzi schemes.

Smooth move by CZ

[Big Hairy Gorilla]

I agreed with pretty much everyones comments so far. Ponzi schemes require the cash coming in. A certain number of people/transactions get paid out in real dollars here and there. That keeps the myth alive. There is some credit card risk-like model regarding paying out. But I have to think, after reading that the bankruptcy of FTX GROUP of something, what, 130 companies ?? Wtf is that about? It's basically unregulated securities trading, accounting ledger entries moving back and forth. There is no value to back it otherwise buddy there would still be sitting on who knows, 80%. Come on! Last week he was f#cking King of a Small World with $16 Beeellion "dollars" ... and 5 days later he's begging forgiveness, arguably 99% broke, 130 companies are bankrupt, and they're in criminal territory in the Bahamas,. That guy will be lucky to be alive, I imagine there might be some unhappy people somewhere. But then CZ. He *should* be scared. Regulations take forever but that guy would get to preserve whatever "value" he's got locked up in craptocoins.

Mining, is minting. Coins come straight out of some unicorn's ass. Yeah. Really. Want some? I know a really really good one for you. So if regs come in fast enough, CZ doesn't turn into a pumpkin like Friedman-Whatever.

Misread it as $607m real value, true value is zero

[iAmWaySmarterThanYou]

I sort of skimmed over the list of shit coins they hold and then saw USD $607m and thought ok, they're worth $607m not the bullshit $78 billion then I looked again and realized that was USDT aka Tether aka more shit coin bullshit. Their true reserves of things of real value seems to be zero.

Re:

[ByTor-2112]

Not only that, but why is 17.8 billion USDT only "worth" $607 million. Isn't it worth $17.8 billion on paper?

Re:

[Opportunist]

Here's a sheet of paper, there's a box of crayons, paint whatever number you think looks nice onto it and that's about as close to its value on paper than whatever someone else says.

Quite seriously, it's amazing that adults take this bullshit seriously.

Re: Misread it as $607m real value, true value is

[Jacamoo]

If you can trade that piece of paper, for the value written on it, then that's its value. Economics is not 'bullshit adults take seriously'

Re:

[Opportunist]

That's one might big if right there.

The reason that piece of paper is accepted in exchange for goods or services is mostly that whoever you hand it to trusts that he in turn will get goods and services for it. If he doesn't believe that, all you have is slightly scratchy toilet paper.

Re: Misread it as $607m real value, true value is

[Jacamoo]

Except if the paper has non-intrinsic value (art for example) then someone will pay 5m dollars for a banana.

it's straightforward

[ebcdic]

If you have any money in cryptocurrencies, turn them into real money now before they become worthless.

Binance next to fall

[bsdetector101]

Binance is the next ponzai scheme to fall.....there is nothing to back it up but air !

Now hackers have an idea

[fabriciom]

Now hackers know what they are working for if they hack binance....

17.6 billion Usdt

[Jacamoo]

Is not equal to 600m dollars, unless the whole crypto universe has come crashing down.. Typo?