Binance’s native BNB token falls to its lowest stage since July
Binance co-founder and CEO Changpeng Zhao has given several interviews discussing the prospects for the cryptocurrency after a turbulent few weeks in the market.
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Over a month after FTX collapse, investors are concerned about the crypto exchange Binance is not fading.
binance Native token BNB is down 15% over the past week, including a drop of over 6% in the last 24 hours. BNB, first minted in 2017, is according to CoinMarketCap, the fifth most valuable cryptocurrency in the world with a market capitalization of approximately $39 billion. It’s only at the back Bitcoin, etherTether and USD coins.
The latest issue looming over Binance is FTX’s bankruptcy proceedings. Binance was the first outside investor in FTX. When exiting its stake in the company last year, Binance received a payment of around $2.1 billion.
In an interview with CNBC’s “Squawk Box” on Thursday, Binance CEO Changpeng Zhao dismissed concerns that his company could reclaim that money while FTX weaves its way through bankruptcy court and trustees attempt to stop all of FTX’s fraudulent transfers external companies or investors.
“We’re doing fine financially,” Zhao said after being asked by CNBC’s Becky Quick if the company could handle a $2.1 billion claim.
Crypto investors have become wary of comments from top executives about the financial health of their companies. FTX founder and ex-CEO Sam Bankman-Fried said on Twitter that his company’s assets were fine, even though executives knew it was in the midst of a liquidity crisis that eventually forced the exchange into bankruptcy. Bankman-Fried was arrested in the Bahamas this week and has been charged by US prosecutors with fraud and money laundering.
Payout requests are another area of concern. Zhao said around $1.14 billion in net withdrawals took place on Tuesday, but tweeted that these “were not the highest withdrawals we processed, not even the top.” [five].” On Wednesday, he said the situation had “stabilized”. Blockchain analytics firm Nansen said the withdrawal count hit as high as $3 billion on Tuesday.
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A Binance spokesperson told CNBC in a statement, “We passed this extreme stress test because we have a very simple business model — custody of assets and generating revenue from transaction fees.” The spokesman did not immediately respond to a question about BNB’s decline.
Binance u FTX were closely related. Zhao publicly announced last month that his company was liquidating its position in FTT, FTX’s native coin, amid concerns over the solvency of FTX and its sister trading firm, Alameda Research.
FTX then faced an immediate surge in withdrawal requests, and Binance stepped in with a non-binding agreement to acquire the company as part of a bailout plan. A day later, Binance pulled out of the deal, stating that FTX’s “issues are beyond our control or ability to help.”
Like all major crypto projects and companies, Binance has developed its own currency. On its website, the company says that people “can use BNB to pay for goods and services, settle transaction fees on Binance Smart Chain, participate in exclusive token sales, and more.” Areas where BNB can be used include payments, travel and entertainment, according to the website.
According to CoinMarketCap, there is a circulating supply of about 160 million BNB out of a maximum total supply of 200 million. Bloomberg reported in June that the SEC is investigating whether the 2017 token sale was a security offering that should have been registered with regulators.
— CNBC’s MacKenzie Sigalos contributed to this report.
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