Major red flags from Binance.
Recently on December the 15 2022 on CNBC CZ was made several misleading and extremely alarming statements which call into question the very legitimacy of the company. Most of these statements are from the CNBC news interview which is a must watch but some are from from twitter and older interviews.
Statement 1: "many of them (auditing firms) don't even know how to audit crypto exchanges" This is veritably false because coin-base is audited by Deloitte which is one of the big 4. There is nothing so complex about crpyto exchanges that makes them somehow magically imperceptible to the incredibly sophisticated pieces of software that modern accounting firms use. The cross border operations of the company would not be a problem for a big 4 accounting firm.
Statement 2: "For most people, for 99% of people today, asking them to hold crypto on their own, they will end up losing it" This does not need explanation this is just him stating something that people who are not very knowledgeable will believe to try to increase trust in exchanges which inherently pray on financially unsophisticated people luring them in with the promises of the embracing of out-sized risk through an extensive offering of scam tokens and extreme leverage. As well as the false belief that centrally holding coins in a location is somehow safe in any way which historically evidence alone shows its actually extremely dangerous.
Statement 3: CZ tweeted "audited proof of reserves, transparency" in regards to a document by Mazars. The issue with this is that the firm he hired to make these statements explicitly stated that this was NOT an audit but rather just an AUP which is NOT in any way an audit. Mazars pulled out of all dealings with Binance shortly afterwards which is the mother of all red flags. Thats right the CEO directly lied falsly claiming to have been audited without actually getting audited this indicative that Binance is trying to dodge an audit because it has something to hide.
Statement 4: "we don't own loans to anyone you can ask around" This is easily Binance's most closely guarded secret because they have never been audited and in the mazars report the left the liabilities section as N/A rather than 0 dollars that means they seem to be hiding something. The shadiest part about this one is he said that on twitter but than in on the CNBC interview he said: "we don't have loans to anyone that we depend on for our next payroll." this is a change from the first statements if you have no loans at all why specify about the dependency into the next payroll. Either you have no loans of any kind at all or you don't. This all could be proved false or true with an audit but the company refuses to get one, for this to be taken as fact you would have to just go out on a limb and trust CZ and in the crypto landscape that type of thinking of going out and trusting exchange CEO's has a bad track record.
Keeping your money in Binance is like standing on nose of a fishing ship in stormy seas assuming you are not going to get washed away I advise strongly against it. There is no reason you cannot just go with coin-base (even though it sucks) because at least coin-base actually has proof of reserves and a proper GAAP audit from a reputable big 4 accounting firm. This whole crisis of withdrawals and panic could have been avoided had Binance just received a proper audit which they could EASILY get and the only reason they do not want to is likely to hide rather nefarious activity. Blind trust in this industry has not worked historically I am willing to bet a decent amount of credibility that binance is engaged in some kind of criminal enterprise/activity the 2 likely ones are either the misappropriation of customer funds or the laundering of money for Iran/Russia but that is just credible speculation which is not yet confirmed or denied. The future of crypto is likely to be a blow up followed by ice age than self storage at this rate.
Statement 1: "many of them (auditing firms) don't even know how to audit crypto exchanges" This is veritably false because coin-base is audited by Deloitte which is one of the big 4. There is nothing so complex about crpyto exchanges that makes them somehow magically imperceptible to the incredibly sophisticated pieces of software that modern accounting firms use. The cross border operations of the company would not be a problem for a big 4 accounting firm.
Statement 2: "For most people, for 99% of people today, asking them to hold crypto on their own, they will end up losing it" This does not need explanation this is just him stating something that people who are not very knowledgeable will believe to try to increase trust in exchanges which inherently pray on financially unsophisticated people luring them in with the promises of the embracing of out-sized risk through an extensive offering of scam tokens and extreme leverage. As well as the false belief that centrally holding coins in a location is somehow safe in any way which historically evidence alone shows its actually extremely dangerous.
Statement 3: CZ tweeted "audited proof of reserves, transparency" in regards to a document by Mazars. The issue with this is that the firm he hired to make these statements explicitly stated that this was NOT an audit but rather just an AUP which is NOT in any way an audit. Mazars pulled out of all dealings with Binance shortly afterwards which is the mother of all red flags. Thats right the CEO directly lied falsly claiming to have been audited without actually getting audited this indicative that Binance is trying to dodge an audit because it has something to hide.
Statement 4: "we don't own loans to anyone you can ask around" This is easily Binance's most closely guarded secret because they have never been audited and in the mazars report the left the liabilities section as N/A rather than 0 dollars that means they seem to be hiding something. The shadiest part about this one is he said that on twitter but than in on the CNBC interview he said: "we don't have loans to anyone that we depend on for our next payroll." this is a change from the first statements if you have no loans at all why specify about the dependency into the next payroll. Either you have no loans of any kind at all or you don't. This all could be proved false or true with an audit but the company refuses to get one, for this to be taken as fact you would have to just go out on a limb and trust CZ and in the crypto landscape that type of thinking of going out and trusting exchange CEO's has a bad track record.
Keeping your money in Binance is like standing on nose of a fishing ship in stormy seas assuming you are not going to get washed away I advise strongly against it. There is no reason you cannot just go with coin-base (even though it sucks) because at least coin-base actually has proof of reserves and a proper GAAP audit from a reputable big 4 accounting firm. This whole crisis of withdrawals and panic could have been avoided had Binance just received a proper audit which they could EASILY get and the only reason they do not want to is likely to hide rather nefarious activity. Blind trust in this industry has not worked historically I am willing to bet a decent amount of credibility that binance is engaged in some kind of criminal enterprise/activity the 2 likely ones are either the misappropriation of customer funds or the laundering of money for Iran/Russia but that is just credible speculation which is not yet confirmed or denied. The future of crypto is likely to be a blow up followed by ice age than self storage at this rate.
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