Ever since it was announced it seems like the majority of the attention has been on the fact that CZ was stepping down from Binance and not the fact that Binance has to pay $4.3B in fines…. and that this doesn't even cover the SEC lawsuit against Binance US.
$4.3B is 63% of the size of the hole in FTX balance sheet and 350% the size of the hole in Celsius, with that context it adds a lot of perspective to just how big this number is.
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Back in December Mazars audited Binance and stated they hold 101% of the user assets in custody. They later stated they weren't confident auditing crypto companies and removed the report from their website. source
So lets look at three possible Scenarios.
- Best case Scenario – Binance has $4.3B or can get $4.3B without touching their crypto assets to cover the fees.
- Semi Bad case Scenario – Binance liquidates their over collateralized 1% in crypto assets to pay the $4.3B fee…. that would mean they need to directly hold $430B (30% of all crypto assets)
- Worst cast Scenario – Binance can't afford to pay that fine with their own funds, and digs into other assets in their custody (user funds).
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In Dec. 2022 When CZ was directly asked if his company had enough funds to pay $2.1B if a claw back was attempted his response was “We'll let the lawyers handle it”. source and that's less than 50% of the fee size Binance owes to the US.
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I think people have been primarily watching the market to see the consequences of this Binance news and so long as prices continue to go up and the market remains Bullish people are going to underestimate the impact of what this actually means over the short term for Crypto….
Binance should be able to cover it. They’re big enough and long lived enough to be able to do it. Even if it involves shady shit with their own BNB.
I understand Binance isn’t Crypto and long term whatever happens to Binance won’t matter for Bitcoin. I’m personally incredibly bearish on what this might mean for Binance as an entity and as a result what that might mean for Crypto over the short term.
I think the biggest threat is probably to holders of BNB, in the event Binance liquidates BNB to pay fees, but this spillover of Binance in trouble will IMO short term hurt all crypto.
There’s a good tv interview with CZ from like a year ago where the person asks them if they could come up with $2b if needed. He dodged the question repeatedly and would only say that they were financially okay. It was a little sketch and certainly came off like they weren’t okay.
We’re about to find out in the next year.
The market cap of BNB is 35 billion. They’ll need to draw their holdings down over years to make the payments but I think they’ll be able to. It’ll just hurt the token price.
Look, with the way other things have gone down recently (FTX, Celsius) and the way this is going down right now i would already consider binance finished if I were you. These exchanges don’t deserve any trust or belief they can sustain themselves based on those two cases alone. Don’t deserve a shred of credibility. Get your assets off and remember not your keys not your crypto.
Isn’t a little bit obvious that people should move their funds off of Binance? I mean, still transact with them if you have to, but I don’t think I’ll feel any pity if they go down and we all hear these horror stories about people losing their life savings.
Depends on their liquidity outside crypto space.
Holdings are here. https://www.binance.com/en/proof-of-reserves#
Whether they are good for it or not depends on other undisclosed liabilities / assets.
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Can someone ELI5 what CZ pleaded guilty to? I read somewhere that the maximum sentence is 18 months. Raise your hand if you wouldn’t go to prison for 18 months if that allowed you to accumulate equity in a multi-billion dollar company…
They moved funds last month already to a newly created wallet so yes they are able to pay still enough user assets in binance hot wallet/cold wallets
Everyone is faming coinbase and kraken they stoll have just a fraction of binance daily volume i spot and futures and you concider them rich companies 🙂
Binance now has to play by the rules. No more “VIP customers” (aka money launderers). The first thing that needs to happen is a legit 3rd party audit of their holdings and undisclosed liabilities/assets.
~$2b in outflows in the past 3 days doesn’t exactly exude confidence..
You’d have to be brain dead to hold anything on Binance right now.
Binance has massive income from Binance Launchpad.
Plus BNB
Plus they have significantly more trade volume than Ftx and despite CZs crimes, he isnt the naive criminal SBF is. Binance financials are in strong shape.
I don’t think they will have a problem paying.
Binance has reported a 800 million to 1 billion dollar profit on a 5.5 billion dollar revenue. In 2021 they had 20 billion dollar revenue and in 2022 they have a 12 billion dollar revenue. If combined this would make in between 6 and 7 billion dollars in profit in 2020-2023.
Binance is so much bigger then FTX. the reported volume was 719 billion for FTX in 2021, and an astonishing 9580 billion dollar trading volume for binance in 2021. They are a money printing machine. i believe it’s a big chunk, but they can easily pay it.
This is a literal coup on our biggest exchange and everyone here just eats it up. The dream is dead, the war is lost, next up is the world of CBDC’s.
So everyone is saying Binance is done for, so what would be the next safe-by-the-rules exchange then? Coinbase? Kucoin? Crypto com?
Look at this way, if Binance can pay the fines then it’s all good. But if they can’t then everyone’s holdings are gonna go poof.
Safest option is not to hold fund on Binance.
One of the directors of Coinbase did the math using Binance’s latest proof of reserves and showed that Binance could pay this with 0 crypto sales. It was posted on Twitter.
End of thread.
No. They will have tether print a shit load of tether or they will sell customer assets along with their assets like bnb. If you have been watching bnb it had a big sell off right after the news broke
They have a good business model, even if they couldn’t pay up front they would find lenders / investors to borrow from. They will have paid their pound of flesh and will be left alone for a while
Coinbase director seems to think Binance won’t have any problems:
>Analyzing Binance Corporate’s Proof of Reserves, Grogan pointed out the firm’s total assets amounted to $6.35 billion, with a significant portion in stablecoins valued at $3.19 billion.
>”Doesn’t include off-chain cash balances or funds held in wallets not in PoR. Most likely able to pay full $4.3B DoJ fine with 0 crypto asset sales.”
OP is claiming the biggest exchange in the world doesn’t have 4 billion lying around, the fud is unreal on this one.
They habe a volume of 10b per day. How much in fees do they take? 0.5%? That’s a cool 50m every single day for them already. Then they make a bunch off of margin trading and probably insider trading when they list new coins. They aren’t hurting for money.
I can’t believe people, in a crypto currency reddit channel no less , thinks 4.3billion is a big amount for an entity like Binance.
Why are you comparing Binance to FTX? They actually have PoR on their site btw. Unless you think they’re lying about their debt, they should be fine.
These things don’t have to be paid immediately. It can be done over time with so this is going to be just fine.
They have to pay installments, don’t they? I think right now, no, but if they make it to the real bull.market, then definitely.
So from what I read there are no “holes in the balance sheet”
They just allowed money laundering. Which isn’t good but it’s not defrauding customers.
And the plot thickens.
I guess this is shaping to be the capitulation, wince Binance will prefer to liquidate simple assets than using reserve cash and BTC holding to pay it.
I doubt they will be insolvent, but they will dump a bunch of shit in the market, especially alts.
Binance has at least 500 000 BTC. Its visible on the top100 richest btc addresses, the nr1 and other top addresses being binance.
Thats not counting their ETH addresses. On Etherscan, you can find addresses called “Binance 1”, “Binance 2” etc all the way up to 20. Each holds tens of millions to hundreds of millions of dollars in Tokens and ETH.
4.3 billion isnt nothing, but its also only a fraction of Binance’s total wealth. I dont think it will phaze CZ.
Yea because they steal peoples money by blocking their accounts, asking for impossible proof of wealth things
Binance collects fees in crypto.
So, no, I doubt they have 4.3B $ in cash. They may have 4.3B in Tether and Bitcoin and other crypto such as BNB. In which case they need to convert all into USD.
All would likely be OTC transactions spread over time.
Then the question becomes, can tether actually redeem multiple billions of USDT directly to cash?
Probably not.
I don’t understand how this guy can be prosecuted when binance is not an American company. Doesnt cz live in another Asian country. how can the SEC have any reach there was somebody else that ran the USA website
The big difference here is that Binance probably isn’t gambling all its money away behind the scenes like FTX and Celsius were. Binance is evil because of their greed and will take money from anyone at anytime. FTX and Celsius is evil because they’re completely incompetent and thought they could get away with running a house of cards as an exchange. Binance is making money hand over fist. Celsius and FTX were losing it as fast as Binance was making it. Two very different cases here.
They will definitely pay in installments and probably made a shit tone more from this risky move.
Interesting that they did not fight it and accepted to pay and he stepped down, so strange
Yes they absolutely can. They’ve been the top dog in crypto since the early days. Their token alone is #3. They’ll be fine
Binance is not FTX, is hasn’t spent user funds! Funds are backed with accosiated crypto. I’m not sure why people keep making this comparison. FTX was a scam, run by a rich spoiled kid who had no clue!!
I’ve got an even bigger question, what the hell do the shrimp and squid emojis mean that are next to your moons?
CZ will just start a Go-Fund-Me page in Beijing and get everyone in China to drop him a few bucks…problem solved
The government wants the money. They will work with Binance to put a payment plan in place so they can get their money.
Why U.S have to get involve? You don’t see other country getting involve in this bs lawsuit.
Ohh let me get U.S is in debt and they try to get money whenever they can..
Binance prolly does more in transactions than most of the top exhanges combined (and way more than FTX) annnd just think of how my h BNB has appreciated in value. Drop in the bucket.
Coinbase has like $5.5 in cash. Binance is way bigger so I’d figure they probably have at least 2x as much.
They’re aren’t just cutting a check for $4.3 billion today. Most of it is forfeitures which sounds like money the US already seized and now they get to keep. The rest will be paid over the next 1+ year.
Binance is wayyy bigger than FTX and Celsius combined. At one point 80% of all crypto volume was on Binance.
CZ shoulda opened up a bank the fines for the criminal activity are much less than what they get away with. 😐
Kraken made 40billion just from fees from 2020-2022. So Binance should be able to cover the cost of this fine. That if there’s still any money left in the reserves
It is telling how crypto companies get fined BILLIONS yet banks only get a mere slap on the wrist for literal currency manipulation.
Hey guys, remember who was the original owner of those four billions? Yep, Binance is like a casino, winning with every transaction, especially the shady pump & dumps and hollow ico’s on the binance chain.
everyone can say they can pay a few billion dollars until they actually have to do it
it’s just like your friend who will pay you back any time now…
Wasn’t there a txn of Binance storage wallet transferring 3.9b to a Binance wallet on the day of the sentence already?