33.6 C
New York

Binance’s native BNB token plunges to lowest since July


Binance’s Co-founder & CEO Changpeng Zhao has given several interviews discussing the outlook for cryptocurrency following a turbulent couple of weeks available in the market.

NurPhoto / Contributor / Getty Images

Over a month after the collapse of FTX, investor concern over crypto exchange Binance is not fading.

Binance’s native token, BNB, has fallen 15% previously week, including a drop of over 6% previously 24 hours. BNB, first minted in 2017, is the world’s fifth most respected cryptocurrency, with a market cap of about $39 billion, in accordance with CoinMarketCap. It’s behind only bitcoin, ethereum, tether and USD Coin.

The newest issue looming over Binance is FTX’s bankruptcy proceedings. Binance was the primary outside investor in FTX. In exiting its equity position in the corporate last yr, Binance received payment equal to roughly $2.1 billion.

In an interview with CNBC’s “Squawk Box” on Thursday, Binance CEO Changpeng Zhao dismissed concerns that his company could have that cash clawed back as FTX winds its way through bankruptcy court and trustees look to retrieve any fraudulent conveyances made by FTX to outside businesses or investors.

“We’re financially OK,” Zhao said, after he was asked by CNBC’s Becky Quick if the corporate could handle a $2.1 billion demand.

Crypto investors have develop into skeptical of comments from top executives in regards to the financial health of their firms. FTX founder and ex-CEO Sam Bankman-Fried said on Twitter that his company’s assets were superb, whilst executives knew it was within the midst of a liquidity crunch that eventually forced the exchange into chapter 11. Bankman-Fried was arrested this week within the Bahamas and charged by U.S. prosecutors with fraud and money laundering.

Withdrawal demands are one other area of concern. Zhao said that around $1.14 billion of net withdrawals took place on Tuesday, but tweeted that this was “not the very best withdrawals we processed, not even top [five].” On Wednesday, he said the situation had “stabilized.” Blockchain analytics firm Nansen said the withdrawal number on Tuesday reached as high as $3 billion.

Read more about tech and crypto from CNBC Pro

A Binance spokesperson told CNBC in an announcement that, “we passed this extreme stress test because we run a quite simple business model – hold assets in custody and generate revenue from transaction fees.” The spokesperson didn’t provide a direct response to a matter in regards to the drop in BNB.

Binance and FTX were intimately connected. Zhao announced publicly last month that his company was liquidating its position in FTT, FTX’s native coin, amid concerns surrounding the solvency of each FTX and its sister trading firm, Alameda Research.

FTX then faced a direct surge in withdrawal demands, and Binance stepped in with a non-binding agreement to accumulate the corporate as a part of a rescue plan. A day later, Binance backed out of the deal, stating that FTX’s “issues are beyond our control or ability to assist.”

Like all of the main crypto projects and firms, Binance developed its own currency. On its website, the corporate says people can “use BNB to pay for goods and services, settle transaction fees on Binance Smart Chain, take part in exclusive token sales and more.” Areas where BNB may be used, the positioning says, include payment, travel and entertainment.

There is a circulating supply of about 160 million BNB out of a complete maximum supply of 200 million, in accordance with CoinMarketCap. Bloomberg reported in June that the SEC was investigating whether the 2017 token sale amounted to a security offered that ought to have been registered with regulators.

— CNBC’s MacKenzie Sigalos contributed to this report.

WATCH: Regulators highlight top risks: industrial real estate, credit losses, crypto

Regulators highlight top risks: Commercial real estate, credit losses and crypto

Get the latest Sports Updates (Soccer, NBA, NFL, Hockey, Racing, etc.) and Breaking News From the United States, United Kingdom, and all around the world.

Related articles


Recent articles