Among a number of revelations about the big companies in the cryptocurrency industry, from Crypto.com holding 20% of its reserves in the meme token Shiba Inu, and FTX holding $9bn in liabilities against just $1bn of cash on hand, a new report outlined how Binance is managing its own funds. Primarily seen as the last exchange which has weathered the downturns in the cryptocurrency sector, the report says that 40% of Binance’s $74.7bn holdings are placed in the company’s own native cryptocurrency and stablecoin.
Binance Bets Big on Own Cryptocurrency
The report which Bloomberg shared comes after Binance boss and co-founder Changpeng Zhao said that he would like for his company to be more transparent in order to inspire trust in consumers, something that many other companies have failed to do recently. Besides, the collapse of Sam Bankman-Fried’s exchange has unleashed unprecedented scrutiny from government watchdogs into the cryptocurrency sectors, which gives Binance all the more reason to seek to be fully transparent about its operations.
Bloomberg reported that $23bn of the total reserves were stored in BUSD, the native currency for the exchange. Another $6.4bn was held in Binancecoin and Bitcoin accounted for 10.5% of the total reserves, along with 9.8% for Ether. The crypto sector is now looking to Binance for guidance, after FTX collapsed and filed for bankruptcy under Chapter 11, begging the question if the crypto industry will ever bounce back from this.
Meanwhile, celebrities who endorsed FTX have been hit with a lawsuit alleging that they knowingly instigated people to put money behind FTX, which turned out to be operating as a “Ponzi scheme.” Binance has criticized. There has been much fretting over whether cryptocurrencies would be able to absorb the latest meltdown.
Peter Schiff, the man who called the subprime mortgage crisis in 2007-2008, has called the recent developments not “crypto winter,” but “crypto extinction.” Schiff has been known for his determined stance on crypto, which is that it would eventually hit zero.
Meanwhile, a new report by the Bank for International Settlements indicated that Bitcoin investors could have potentially made more money by gambling in casinos rather than investing in cryptocurrency.