Binance Faces Scrutiny Over Alleged ICO Missteps And Token Distribution Discrepancies
06 Oktober 2023 - 12:00AM
NEWSBTC
Binance, the world’s largest cryptocurrency exchange, is currently
grappling with challenges that have raised concerns about its
credibility and market performance. Recent reports by Forbes
shed light on Binance’s initial coin offering (ICO) and the
subsequent distribution of its native cryptocurrency, Binance Coin
(BNB). Behind The Curtain The investigation reveals
allegations of undisclosed token retention, discrepancies in the
ICO process, and the accumulation of a significant token reserve by
Binance. Related Reading: This Ethereum Metric Is Retesting
The Bear-Bull Junction, Will Break Happen? Per the report, in June
2017, Binance initiated its ICO, aiming to raise $15 million by
selling 100 million BNB tokens. However, the Forbes investigation,
conducted with the assistance of crypto forensic firms, suggests
that only around 10.78 million BNB tokens were transferred to
investors during the ICO. An additional 20 million tokens
were “quietly” allocated to angel investors, doubling their initial
allocation to 40 million tokens. Consequently, according to Forbes,
Binance likely raised less than $5 million during the ICO, contrary
to the $15 million claimed by founder Changpeng Zhao. The
Forbes report indicates that Binance’s white paper did not disclose
the company’s plans for unsold tokens in the event of an undersold
ICO. While it is not illegal for issuers to retain unsold tokens,
transparency is crucial in such cases, Forbes alleges.
Binance founders and insiders reportedly ended up with 145 million
BNB tokens instead of the originally planned 80 million. These
tokens, initially valued at less than $10 million, are now
estimated to be worth approximately $14 billion. Furthermore,
Binance implemented a token buyback and burn program to reduce the
total supply of BNB tokens over time. According to Binance’s
website, approximately 48 million tokens have been burned as of
August 31, 2023. However, Forbes suggests that Binance controls
nearly 117 million tokens, accounting for 76% of the total
outstanding supply. The analysis combines disclosed tokens
issued to the founding team with a proprietary probabilistic
analysis that identifies previously undisclosed wallets holding
customer funds and serving other corporate purposes. Forbes
concludes discrepancies and lack of transparency surrounding
Binance’s ICO and token distribution raise questions about the
integrity of reported trading volumes and the adequacy of consumer
protections. Binance CEO Maintains Silence Amid Ongoing
Forbes Allegations Changpeng Zhao (CZ), the Chief Executive
Officer of Binance, has remained silent in the face of recent
allegations and ongoing investigations brought forth by
Forbes. The prolonged exchange of statements between the
cryptocurrency firm and the renowned news outlet has endured for a
significant period. Binance had taken legal action against Forbes
in 2020, filing a defamation lawsuit in the US District Court in
New Jersey. The lawsuit stemmed from Forbes’ publication of
“false statements” that Binance allegedly used deceptive practices
to deceive regulators and participated in money laundering
activities. Forbes published a series of articles that made
damaging claims about Binance’s corporate structure, asserting that
it was deliberately designed to deceive regulators and engaged in
activities characteristic of money laundering. Binance vehemently
denied these allegations, deeming them false and highly
defamatory. Binance’s attorney, Charles J. Harder, has
emphasized the harm caused to Binance’s reputation by Forbes’
misleading story. Binance had requested a retraction or correction
from Forbes, which was refused, leading to the necessity of the
defamation lawsuit. Related Reading: XRP, Polygon See
Month-High Volumes As Investors Show FOMO Overall, Binance and
Forbes have been embroiled in contentious claims and disputes, with
both parties accusing each other of disseminating inaccurate
information. As the situation unfolds, it remains uncertain
how the cryptocurrency exchange will respond to the latest
allegations put forth by Forbes. Featured image from Shutterstock,
chart from TradingView.com
Mina (COIN:MINAUSD)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Mina (COIN:MINAUSD)
Historical Stock Chart
Von Jul 2023 bis Jul 2024