John Reed Stark, former head of the US Securities and Exchange Committee’s (SEC) Internet Enforcement Agency, said that Binance’s financial situation is even more ‘uncertain’ than that of FTX. In the middle, Boris Johnson’s younger brother backed off as scrutiny on the Bitcoin exchange grew
“The financial situation of the Bitcoin exchange is more uncertain than FTX”
John Reed Stark, former head of the US Securities and Exchange Board’s Internet Enforcement Agency, claimed that Binance’s financial situation is even more uncertain than that of FTX, Reuters reported. He also stated that there is no transparency from the Bitcoin exchange.
According to Reuters’ analysis of the crypto giant’s corporate documents, little is known about Binance. The Bitcoin exchange does not disclose information such as cash reserves, profits, and income. It is also unknown where the exchange, which processes crypto at the cost of $ 22 trillion this year, is actually based. Binance does not disclose information about the local token’s role in the balance sheet or its exposure to risk while allowing customers to margin trade with borrowed funds.
A review of paperwork from Binance’s subsidiaries in countries around the world shows that few details are given about the overall business structure, operation, and how Binance.com moves funds amid its own and its many subsidiaries. Evidence suggests that these private entities merely serve as ‘window decorations’ for Binance, which has limited or no activity on its own.
Mazars has published a report on Binance’s proof of reserve. However, after the backlash, Mazars announced that it will suspend working with crypto companies going forward. The decision affected the price of Bitcoin and other cryptocurrencies due to the uncertainty surrounding Binance’s financial health. There are reports circulating that a number of US federal prosecutors have gathered sufficient evidence to file a criminal complaint against Binance CEO Changpeng Zhao with a money laundering argument.
Jo Johnson resigns from Binance advisory role
Boris Johnson’s younger brother Jo has resigned from his advisory mission to Binance. Lord Johnson of Marylebone has appeared on Bfinity’s UK application committee, The Telegraph reported. Binanc founded this payment company in September. Johnson was also on the board of directors at the same time. Lord Vaizey, a former Conservative minister of culture, who is a member of Binance’s global advisory committee, is also on the delegation.
The former Tory lawmaker and universities minister has resigned as scrutiny over Binance’s finances grows. Founder Changpeng Zhao insisted last week that “business is as usual” despite investors pulling in $6 billion in funding. Later it turned out that the auditor Mazars stopped working with him.
Johnson’s resignation comes amid the crisis in the cryptocurrency industry, following last month’s collapse of one of Binance’s rivals, FTX, and the arrest of FTX founder Sam Bankman-Fried, accused in the US of fraud, money laundering and conspiracy theses. Johnson and Vaizey’s ties to Binance underline the company’s efforts to attract attention from UK politicians and regulators.
Last year, the Financial Conduct Authority prevented the company from setting up a division in the UK due to concerns about its transparency. Earlier this month, Johnson became the leader of the digital education platform FutureLearn. Dutch Global University Systems had acquired FutureLearn. Johnson said:
I took on a new role as the leader of the digital learning platform FutureLearn. I’m downscaling other activities to focus on this.