Binance Responds To Claims That Their Stablecoin Wasn’t Fully Backed

Binance Responds To Claims That Their Stablecoin Wasn’t Fully Backed

The crypto exchange responds to a Bloomberg report from January 10, 2023, which pointed out that Binance’s stablecoin Binance-peg BUSD seems to have had operational flaws not long ago. 

 

In a Binance blog post, the world’s largest crypto exchange addressed the allegation made in the aforementioned Bloomberg report. More precisely, they address the idea that Binance-peg BUSD ‘doesn’t always appear to have been completely backed by BUSD’.

In the Bloomberg report, a Binance spokesperson is quoted admitting that the backing process requires a lot of cooperation between different teams, which has, as the spokesperson said it, resulted ‘in operational delays in the past’.

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But, according to the exchange’s own blog post, the problematic, and not flawless process of maintaining the backing is a thing of the past. Apparently, there was a ‘timing mismatch in backing Binance-Peg BUSD with BUSD’ which is the core reason for all the criticism, and skepticism about the real state of the crypto exchange’s stablecoin.

The blog post states that:

The rebalancing did not always keep pace with the demand for Binance-Peg BUSD. Having identified this ourselves last year we now rebalance more frequently to ensure that Binance-Peg BUSD is transparently fully backed

Binance emphasizes that the company will make it clear and widely accessible for verifying by including it in the Proof of Reserves system that is still in the process of being developed.

This event marks yet another FUD occurrence in the online crypto sphere. Just recently, Binance posted a blog post in Chinese, in which the exchange addressed questions regarding the company’s financial health, status and other sensitive topics.

Aaron S. - Expert Reviewer

by Aaron S. - Expert Reviewer, BitDegree


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