After weeks of accusations and counter-accusations, Binance has addressed the problems highlighted in an effort to stop the confusion and doubt that has been shaking the exchange.
As a proponent of transparency and openness, Binance said in its seven-part blog post that an official response to the misleading information circulating in the cryptocurrency community was important.
Recall that since the demise of its competition, FTX, Binance has been dealing with a variety of obstacles. At one time, the Department of Justice (DOJ) of the United States was moving toward a full prosecution of the trade. Recently, the auditing company Mazars withdrew from examining the financial soundness of the exchange.
In response to investor and ecosystem-wide worries, Binance stated that it had no liquidity difficulties despite the restriction of USDC withdrawals. Regarding its reserves, the exchange remarked that its finances were in excellent shape.
In light of the Mazars scandal, Binance highlighted that auditing encrypted businesses such as theirs were a novel notion. Therefore, the claims that the four largest accounting firms rejected the auditing procedure were without merit.
Regarding the DOJ prosecution, the blog post hinted at the reluctance to provide comprehensive clarity. However, it stated that it had complied with regulatory standards in a number of nations and will handle the matter at a later point.
Despite the explanation, Binance Coin [BNB] reversed a big increase. With an increase of 18.36%, 24-hour trading volume was able to overcome price stagnation. Santiment, an on-chain data source, said that BNB volume was $546,133,000 at press time.
This circumstance represented an effort by traders to enter the BNB market in response to price fluctuation. On the derivatives market, traders behaved differently than they did on the general market.
This was due to the fact that Santiment data indicated a significant drop in the exchange’s funding rate of -0.007%, suggesting a regression in futures and options contract holdings.
Based on its active addresses, on-chain statistics demonstrated that BNB was capable of attracting and enhancing user engagement. This was a result of the increase in seven-day active addresses on December 21, despite the fact that the metric had decreased to 23,600 at the time of writing.
As a result, Binance was in the process of reestablishing confidence after billions of dollars in outflows.
According to its 30-day Market Value to Realized Value (MVRV) ratio, BNB remained steadfast in maintaining investor losses. The MVRV indicated an undervalued situation at -13.27%. However, it also signalled unfavourable results for those who purchased at a greater price than the current market price.