Former SEC official claims that Binance’s finances are much messier than FTX
Reuters claims that former head of the U.S. Securities and Exchange Commission’s Office of Internet Enforcement, John Reed Stark, believes that Binance’s finances are even more “opaque” than FTX’s. In addition, he said that the exchange lacks transparency.
According to an investigation of Binance.com’s business papers by Reuters, almost little is known about the leading cryptocurrency exchange.
Binance does not reveal information on its financial reserves, income, or revenues. The whereabouts of the crypto exchange that have handled an estimated $22 trillion worth of cryptocurrency this year is likewise unclear.
Binance does not provide details on the role of its native cryptocurrency on its balance sheet or its exposure to risk while letting users trade on margin with borrowed funds.
The study of filings from Binance subsidiaries in countries throughout the globe reveals that insufficient data were supplied about the general company structure, operations, and how Binance.com transfers funds across its many subsidiaries. The evidence implies that these private firms function just as “window decoration” for Binance, with little or no independent activity.
Mazars, a multinational auditing company that produced Binance’s proof-of-reserves report, has now indicated that it would no longer engage with cryptocurrency firms going ahead. Due to uncertainties about the financial health of the biggest cryptocurrency exchange, the move drove the price of Bitcoin and other cryptocurrencies.
According to U.Today, certain federal prosecutors in the United States have apparently accumulated sufficient evidence to file criminal charges against Binance CEO Changpeng Zhao for suspected money laundering.