Binance Plots Next Chase Move as FTX Contagious Spreads

Binance continues with audits and acquisitions following the collapse of rival exchange FTX, spreading the infection.

With the fall of FTX, other crypto exchanges are making efforts for greater transparency. While many offer cold wallet balances as proof of store, Binance also offers Merkle Tree access.

Now, Binance has gone a step further, hiring global auditing firm Mazars to verify its token reserves. A spokesperson for the exchange explained that third-party financial verification served to enhance the proof of reserves.

A spokesperson for Mazar said, “Mazar is reviewing all of the information we have publicly shared on Proof of Stake (BTC) to date and will also confirm future updates and tokens.” “The first validation update for BTC will be completed this week.”

In addition to striving for greater transparency, Binance continues to expand to more markets around the world. The exchange announced that it has acquired Japanese-registered crypto exchange service provider Sakura Exchange Bitcoin (SEBC).

Since SEBC is regulated by the Japan Financial Services Agency (JFSA), the acquisition allows Binance to enter the market legitimately. Japan’s recent realization towards crypto integration prompted Binance to re-enter the market after failing to do so four years ago.

FTX Hits Fallout Trading Platform

While Binance strives for greater transparency and market dominance, the effects of the FTX collapse continue to spread. Crypto trading platform Auros Global has become the latest such firm to struggle in the wake of the failure of FTX. Decentralized finance underwriter M11 announced, “Auros is experiencing a short-term liquidity problem as a result of the FTX bankruptcy.”

According to them, Auros defaulted on the principal repayment of a $3 million loan of 2,400 WETH from the credit pool on Maple Finance. While M11 clarified that this missed payment does not mean the loan is in default, it does show that the industry continues to suffer from the questionable financial practices of Sam Bankman-Fried.

Despite years of success with FTX, it seems that Bankman-Fried had always maintained a cavalier approach to risk, compliance and accounting. Prior to the establishment of the exchange, several Bankman-Fried colleagues at Alameda Research resigned due to issues of alleged negligence.

According to these former employees, Bankman-Fried often brushes off concerns about risky gambling on crypto assets. He also claimed that operating cash was often used interchangeably with trading capital, with net balances often being unclear due to poor record-keeping. Many of these same issues have been identified by current employees of FTX managing the bankruptcy of the company.

Join the US Senatorial Fray

As infections continue to spread and Bankman-Fried’s irresponsible actions come to the fore, US senators have begun to speak out.

Senator Elizabeth Warren denounced FTX during a recent hearing of the Senate Banking Committee, which focused on a number of financial appointments.

Alternatively, he commended Martin Gruenberg, acting chairman of the Federal Deposit Insurance Corporation. He added that the collapse of FTX could have had a much greater impact on the traditional banking system if it were not for their efforts to keep crypto separate from the financial markets.

Meanwhile, Senator Sherrod Brown, chairman of the Senate Banking Committee, recently outlined his vision for comprehensive cryptocurrency regulation. In a letter to US Treasury Secretary Janet Yellen, he argued that all relevant financial agencies should conduct oversight.

Long regarded as a key legislator for cryptocurrencies, the Senate Banking Committee stated in the letter that the downfall and decline of FTX requires lawmakers to introduce such legislation.


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