The risk of facing allegations has affected confidence in Binance and this could lead to further losses in the value of BNB.
The FTX crash last month had a devastating impact on the price of the FTT token, issued by the Sam Bankman-Fried (SBF) exchange. This proved that the tokens issued by the exchanges are subject to the same risk as the platforms themselves.
On Tuesday, December 13th, BNB, a token issued by Binance, suffered the same kind of problem. Investigations by the US Department of Justice affected the value of BNB, which was the only Top token that did not open higher. In fact, BNB posted the biggest drop of the day with a 2.3% correction.
Binance has taken advantage of SBF’s empire collapse, with many traders relying on the safety of Changpeng Zhao’s exchange. However, the risk of facing allegations has also affected confidence in Binance, and this could lead to further losses in the value of BNB.
News on Binance FUD Begins to Emerge
In recent days, reports have indicated that Binance has yet to provide meaningful financial data to boost investor confidence. After the big FTX crash, Binance CEO CZ proposed that all exchanges publish proof of reserves to encourage full transparency.
This measure was supposed to serve as a safeguard to restore confidence in cryptocurrency companies. However, some analysts have warned about Binance, as the exchange audit faces several problems.
Binance’s Proof of Reserves (PoR) is essentially the volume of assets it holds on escrow for its users. Even so, clients of the exchange have withdrawn more than $2 billion worth of cryptocurrency.
In the midst of this movement, there is a risk that the exchange’s reserves will run out, although Binance has recently published its PoR and assured that it has all the funds in reserve. That was not enough to allay fears, and the price of BNB is trading lower while most cryptocurrencies are on an upward curve.
BUSD Transactions Are Also Affected
On the other hand, it seems that the whales are trying to stay on the safer side. A whale alert was issued in BUSD with the transfer of 300 million BUSD. The great whale transaction was made from an unknown wallet to the Paxos treasury. This could indicate that the whale is looking to protect his/her assets amid market uncertainty.
Such a move may indicate a change of funds, with the large investor exchanging his BUSD for dollars or other cryptocurrencies. In the last 24 hours alone, Binance clients have withdrawn more than 39,000 Bitcoins (BTC) from their accounts on the exchange to their personal wallets. This could be a sign that investors are hedging amid market uncertainty.
By Audy Castaneda
