Binance Disputes Forbes Report Claiming $1.8 Billion in Customer Collateral was Transferred

Joshua Ramos
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Binance has disputed a Forbes report that claimed $1.8 billion in customer collateral was transferred without alerting users. Specifically, the initial report stated the exchange moved: “$1.8 billion of collateral mean to back its customer’s stablecoins.”

The crypto exchange platform has fought back against the report that cited blockchain data from August to early December. Moreover, the report stated the exchange took the assets and put them to “other undisclosed uses.” Binance is now refuting the allegation.

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Binance Clarifies Blockchain Data

The largest crypto exchange platform by trading volume has had a hard time avoiding headlines in recent weeks. Previously, the SEC directed its regulatory concern toward the issuer of the BUSD stablecoin. Subsequently, the native tokens have been suspended on Coinbase. Now, Forbes has reported the misuse of customer assets.

Binance has disputed the Forbes report that stated $1.8 billion in customer collateral was transferred without customer consent. Specifically, a Binance spokesperson spoke to The Block, refuting Forbes blockchain data analysis.

Source: Unsplash

“The on-chain transactions identified relate to internal wallet management,” the spokesperson stated. “While Binance has previously acknowledged that wallet management processes for Binance-pegged token collateral have not always been flawless, at no time was the collateralization of user assets affected.”

Additionally, the spokesperson stated, “Processes for managing our collateral wallets have been fixed on a longer-term basis and this is verifiable on-chain.” The claims combat the initial Forbes report that stated $1.8 billion in customer funds, all of which in the USD stablecoin (SDCS) tokens, were disbursed.

Forbes stated that $1.1 billion of the transferred assets went to Chicago-based trading firm, Cumberland. Thus, Forbes alleged that the move “may have assisted Binance in its efforts to transform the collateral into its own Binance USD (BUSD) stablecoin.”