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Crypto bros retweeted by Zhao have tried to claim that “comparing Binance to FTX is ridiculous” while citing Binance’s reserves. The problem is, Binance has resisted doing a full audit of its company like rival Coinbase has, which would look at other liabilities rather than just analyze if Binance has a full piggy bank. Op-eds published by the likes of CoinDesk noted how Zhao’s answers have done little to quell anxieties about the company.
The company’s opaqueness was noted in a large Reuters report Monday. Binance does not list an official headquarters, meaning it rarely, if ever, discloses financial information that other public companies regularly do such as its liabilities, costs, and revenues. Though Binance is a private company, the Reuters report noted it analyzed filings in the 14 jurisdictions the company claims it is registered, and noted there was “scant information” pointing to just how well the company is doing. The company has made it clear that most of its revenues come from transaction fees, and Zhao himself has claimed they do not have any venture capital investments and they don’t owe “anybody any money.”
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That’s not to say FTX’s stated “transparency” did anything to stop the exchange from funneling billions of dollars in user’s crypto to hedge fund Alameda Research, which has led to all these federal charges. Still, Binance is currently under federal investigation for money laundering and violating sanctions. So in that way, the two exchanges may have quite a lot in common.
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