CEO Binance CZ Defends Exchange During CNBC Grilling

Reporters from CNBC questioned Binance CEO Changpeng Zhao about the firm’s solvency and issues this week with withdrawals from the exchange.

Due to insufficient USDC reserves on the platform, Binance earlier this week briefly suspended withdrawals of the USD Coin stablecoin. Zhao claimed that the problem stemmed from a New York bank that is used to convert BUSD holdings issued by Paxos into USDC not being open at the time.

“We have the assets to convert,” Zhao said. “There’s no margin, there’s no leverage, we just needed the banks to open. When banks are closed and you try to withdraw money it doesn’t work.”

Zhao said Binance owes money to no one, doesn’t have venture capital investments and has no loans.

“We manage our cash very simply,” the CEO said.

“Just because bitten by one snake doesn’t mean any other animal is the same,” he said, referring to the downfall of Sam Bankman-Fried’s FTX.

Greater clarity

He defended the company’s EARN program by claiming that the client funds there are used as a source of credit for other margin traders, and that “occasionally we do run out because the demand and supply don’t line up, but the money never leaves the platform and we perform margin controls.”

Additionally, he stated that his industry is more open than the majority of conventional organizations and that he wants to establish the benchmark for dependability.

“In our industry we don’t depend that much on trust we depend very much on verification.” 

Zhao responded when asked if Binance could afford to repay the $2.1 billion it earned from leaving FTX last year “Financially, we’re solid. We’ll defer to the legal professionals.”

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