Binance CEO Changpeng Zhao shrugged off speculation about stablecoins like BUSD (CRYPTO: BUSD) getting outlawed by regulators in the United States, saying that it was akin to asking if the Moon may disappear tomorrow.
Responding to queries concerning news reports that Binance’s reserves are full of its own token BUSD, Zhao said it was “very normal” for exchanges to have large reserves of stablecoins because in a market downturn, users prefer stablecoins to cryptocurrencies.
Also read: Why FTX's Collapse Is The Crypto Equivalent Of The 2008 Lehman Brothers Crisis
Asked about regulatory disclosures regarding the risks of these stablecoins, Zhao said Binance does not issue BUSD but Paxos does, and based on his understanding, “Paxos is doing a good job.”
What If BUSD Is Outlawed?
Where It All Started
Asked to explain his tweet where he announced the selling of FTT (CRYPTO: FTT) the native tokens of now bankrupt crypto exchange FTX, Zhao said he had not seen the finances of FTX and did not know how user funds were being used.
However, Zhao continued, he had “hunches” in the back of his head regarding FTX’s relative size, trading volumes, fees, and at the same time, the vast spending of the Sam Bankman-Fried-led crypto exchange.
“The Miami stadium (FTX Arena), the acquisitions, investments in crypto projects. I was always curious about where they were getting all this money from. We also knew how much money they had raised. They just couldn’t have so much cash,” he said.
Zhao further said the only other possible explanation was that Alameda was making tens of billions of dollars, but if it did so, they were ripping off users to the tune of billions of dollars, however, based on their wallet addresses, even FTX’s users did not have that much money.
“So, I could do some mental mathematics - broad strokes - and it doesn’t really add up. But I did not look at their books. They could have been so much smarter, so much [more] magical doing something that we were too dumb to figure out. There could also be a backroom deal where they took a loan from VCs, but I couldn’t know for sure,” he said.
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