Headlines Accusing Binance of Selling Bitcoin to Support BNB Price Amid Regulatory Pressure Seen as FUD

As the largest cryptocurrency exchange by Bitcoin liquidity and register users, Binance has undoubtedly received a fair share of collapse rumors since the implosion of FTX late last year. The Binance insolvency rumors are largely instigated by the increased regulatory scrutiny in the United States, the United Kingdom, and some European countries. Binance is currently facing two major legal charges filed by the United States CFTC and SEC alleging illegal operations. Moreover, the US SEC has argued that most of the digital assets including Cardano (ADA), Polygon (MATIC), and Solana (SOL), among many others, are unregistered securities.

As a result, some market strategists believe Binance and its native coin BNB are doomed for failure.

I have stated for years that CZ and @binance is a global scam and $BNB just a cheap fiat. Watch it all unravel

— Peter Brandt (@PeterLBrandt) August 22, 2023

Nonetheless, the Binance team has obtained operating licenses in different jurisdictions including Dubai, where BNB is traded just like Bitcoin and is not a security.

Binance Has No Liabilities: CZ Reiterates

In the past few days, Binance has been accused of selling its Bitcoin holdings, which includes customers’ assets, to prop the BNB price that recently dropped below the crucial support level of around $240. With over $121 million of Bitcoins withdrawn from Binance in the past few days, the sell pressures on BNB price have been increasing by the day. Furthermore, BNB’s price dropped below the 200 weekly Moving Average (MA) for the first time in its history last week.

In a bid to counter the FUD circulating on the internet, Binance CEO and co-founder Changpeng Zhao (CZ) retweeted a conversation in which he noted that the exchange does not have any loans, or take money from venture capital. CZ further can be heard highlighting that the exchange provides immense liquidity to other smaller exchanges and no customers’ fund leaves the exchange.

Buy Binance Coin (BNB) quickly and securely with PayPal, credit card or bank transfer at eToro. Visit Website <<Instead, CZ noted that the company only uses the customers’ funds in leverage trading and some staking programs that involve smart contracts without the cash leaving the exchange.

The rumors that Binance could soon get insolvent can now be regarded as FUD that largely worked in the past few days. According to the latest crypto market data, BNB’s price dropped as much as $204, a nearly 70 percent low from its ATH achieved during the 2021 bull market.

Bigger Picture

The exponential rise of Binance and its BNB coin in the past few years has attracted the attention of some regulators that want to retain market dominance through fiat and CBDCs. Nonetheless, BNB with about $33 billion in market capitalization and a 24-hour traded volume of approximately $849 million is expected to rally further, perhaps in trillions of dollars in the coming decades amid mainstream crypto adoption. Moreover, Binance is heavily invested in most DeFi protocols that are expected to take center stage in mainstream crypto adoption.

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