- Adam Cochran calls Binance a “Ponzi” scheme with an evident asset shortage.
- He says users’ Binance assets are used without control and Binance Pegged Assets lack complete backing.
- Cochran urges users to withdraw assets from Binance due to discrepancies and lack of transparency.
Venture capital firm Cinneamhain Ventures founder Adam Cochran called out Binance for being a “Ponzi” scheme with an evident “hole across multiple assets.” Comparing the leading exchange with FTX, Cochran said while all funds haven’t yet disappeared, users don’t deserve to pay for CEO Changpeng Zhao’s mistakes.
They are just going to continue this ponzi as long as they can because simps will choose not to believe it.But at this point its clear there is a hole across multiple assets.It's not like FTX, it's not all gone, but you don't deserve to take a hair cut for CZ's mess.— Adam Cochran (adamscochran.eth) (@adamscochran) July 10, 2023
The above was part of a Twitter thread where Cochran highlighted Binance’s BCH shortage to cover withdrawals. However, the founder points out that the BCH on BSC, which instructs users to withdraw, is expected to have a 1:1 correspondence with the native BCH on Binance. Thus, it should be highly unlikely for them to be unsynchronized.
Cochran clarified that, unlike USDC, which has a high number of bridges, BCH shouldn’t be facing this issue since native BCH is partially backed by BSC BCH. According to him, Binance should have control over the assets for any Binance pegged token. Furthermore, he recaps,
Remember when FTX was collapsing, it was the same excuse of network exchanges where they were trying to buy back assets to cover withdraws where there were gaps.
Next, Cochran posted a screenshot where the exchange announced BCH/TUSD and CFX/TUSD trading pairs with zero fees on June 29. He believes Binance’s motive behind the addition is to let users continue reposting BCH while they sustain the illusion of supporting that volume with Sun’s unbacked shell company coin.
Cochran emphasizes that users’ Binance assets are being utilized at the discretion of the platform without user control. Additionally, he notes that the Binance Pegged Assets on BSC lack complete backing. With a deficit in assets, Binance promotes to protect itself. Lastly, Cochran strongly advised users to withdraw their assets from the exchange as soon as possible.
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