Now that Sam Bankman-Fried’s fall from grace is complete, uneasiness is growing around the dominance that his rival Changpeng Zhao’s Binance holds in the cryptocurrency market.
The worries surfaced again on Friday as the accounting firm Mazars Group halted work for Binance and other crypto firms on reports that are meant to demonstrate that the companies hold the necessary reserves needed to cover any potential surge of customer withdrawals.
Zhao, who goes by his initials CZ, has insisted repeatedly that Binance doesn’t misuse customer funds like FTX allegedly did and that his exchange can process whatever amount of withdrawals comes its way. Binance has a longer track record than FTX, proof it’s been able to survive previous “crypto winters,” including a more than 80% plunge in Bitcoin from December of 2017 to the end of 2018.
Still, it's been a tough few days. Mazars' move threatens to cloud an accounting picture many already found opaque — indeed it was likely the market's lack of reassurance from Mazars’ “proof-of-reserves” reports that led the firm to halt all such work. A televised appearance earlier in the week in which CZ was peppered with questions about Binance's financial strength gave critics grist for another round of heckling.
Even for those who ostensibly support CZ and his exchange, Binance’s market supremacy in the wake of FTX’s collapse doesn’t sit well in an industry that preaches decentralization. Weakness in crypto prices that followed headlines about CZ’s company this week reinforce concern that Binance has become a “too big to fail” player in a market where, unlike traditional finance, there’s no one to stop a potential failure, offer a bailout or soothe any contagion.
“I don’t think Binance is trying
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