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.
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…
Click Here to Read the Full Original Article at NewsBTC…
