Binance’s Fear, Uncertainty and Doubt (FUD); here is all you need to know

Temitope Akintade

Dust is still yet to settle on the FTX saga, which has continued to spread contagion in the blockchain space, but there are some indications of problems at the largest crypto exchange by trading volume, Binance. 

Rumours about payout problems, investigations by the US Attorney’s Office for money laundering and sanctions violations, and suspension of withdrawals are making rounds on social media. These have led to FUD (Fear, Uncertainty and Doubt) which has triggered a massive withdrawal by customers. This article will examine the situation surrounding Binance and what to expect going forward.

Read also: Senior Binance executive says the company might not have an exchange in ten years time

Details of Binance withdrawal troubles 

There is a problem surrounding USDC withdrawals that have been halted on ETH and BNB chains. However, the exchange CEO Changpeng Zhao(CZ) has come out on Twitter to clarify the situation. Reminding ‘Fudders’ that it was maintenance planned a week ago: 

Yo, what’s with all the FUD? This maintenance was announced a week ago. Also done now. All resumed,” –  CZ on Twitter. 

binance ceo

CZ said the exchange had seen an increase in USDC withdrawals but the channel to swap from PAX/BUSD to USDC requires going through a bank in NY in USD. The issue is that the banks are not open, but they expect the situation to be restored when the banks open.

Binance prosecution by the United States 

Reports have also emerged that United States authorities have plans to charge Binance over alleged financial crimes. A Reuters report yesterday indicated a split among Department of Justice (DOJ) officials over charging Binance for a series of violations, including unlicensed money transmission, money laundering conspiracy, and criminal sanctions violations. 

As per the report, the split has delayed the next way forward for the investigations that began in 2018. The DOJ will likely indict Binance and its executives if the charges are approved. Some options on the table include negotiating a settlement or closing the case without taking action.

However, the exchange took to Twitter to hit back at the report noting that Reuters was attacking its law enforcement team. According to Binance, the company has increased collaboration with regulators to fight financial crimes on the platforms. 

Since November 2021, for example, Binance responded to over 47,000 law enforcement requests with an average response time of three days, which is faster than any traditional financial institution — some of which can take months, by which point the money has gone,” the exchange said. 

Recall that earlier in June, Binance was at the centre of a controversy over allegations of acting as a conduit for laundering $2.3 billion in illicit funds. Read below:

Binance used as money laundering tool between 2017-2021

Way forward 

Due to the FUD caused by these rumours, the recent withdrawal of crypto from Binance is now close to $2 billion, according to Nansen

binance ceo

CZ, however, addressed the issue with a Twitter thread. Saying that FUD has been following Binance since its ICO in 2017 – numerous articles were spreading negative news about the young crypto exchange as it raised funds for launch. CZ further claimed that FUD also helped the exchange as many decided to invest in the ICO since they believed that negative news could undoubtedly be only about a promising project. 

From now on, crypto users and enthusiasts can only hope those conjectures remain unfounded rather than factual. Apart from the exchange’s native token (BNB) taking a beating which has already started, any confirmation of irregularities or indications of collapse will have ramifications on the general crypto market, which the market might not recover from, considering the exchange’s status in the sector.

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