Crypto Twitter Reacts as CZ Attempts to Spread More FUD

Crypto Twitter Reacts as CZ Attempts to Spread More FUD
24 November 2022

Binance CEO Changpeng Zhao (CZ) has received flak from crypto Twitter after he published a tweet that appeared to question Coinbase Custody’s (BTC) holdings.

In a since deleted tweet, CZ insinuated that Grayscale, operator of the world’s biggest BTC trust, does not actually hold the amount of BTC that it says it does, and that Coinbase Custody currently holds 635 BTC for Grayscale despite holding less than 600,000 BTC 4 months ago.

CZ’s tweet prompted a response from Coinbase CEO Brian Armstrong, who said, “If you see FUD out there – remember, our financials are public (we’re a public company)”. Armstrong then referenced Coinbase’s Q3 shareholder letter, and clarified that the company currently holds “~2M BTC. ~$39.9B worth as of 9/30 (see our 10Q)”. He also said that “we all need to come together to build this industry in a responsible way going forward. Be wary of false information”.

CZ later followed up by saying that Armstrong told him that the numbers in the article were false, and they should work together to “improve transparency in the industry”.

Read more: Is Coinbase’s All-Time-Low Reflective of the Current State of Crypto Exchanges?

Doubts over Greyscale’s financial health have surfaced in recent days, after Genesis Trading, which is also owned by Greyscale’s parent company Digital Currency Group, suspended its redemptions and new loan originations in its lending business in the aftermath of the FTX liquidity crunch. Greyscale also fanned fears by saying that it could not provide its Proof-of-Reserve due to security reasons.

Despite the ongoing uncertainty, crypto Twitter did not take kindly to CZ’s comments, with many users accusing him of spreading unnecessary FUD. One user accused him of being “all about one thing…his empire”, while Will Clemente, co-founder of digital asset research firm Reflexivity Research, said that CZ’s tweet “wasn’t a great look” and that he should be “smart enough to know that exchange and custody wallets are separate”.

Last week, some Reddit users claimed that Binance moved 2.7 billion USDT out of its proof-of-reserves wallet just 20 hours after it had published its “Proof-of-Assets” report. They also noted that the destination address was not mentioned in the report. 200 million USDT was later moved back, leaving 2.5 billion USDT in the undisclosed wallet.

A Binance executive has since responded to the post, stating that the move was to a TRX wallet and “the asset movements are the result of standard operations which move funds between our internal wallets.”

Earlier this month, CZ said that “If an exchange have to move large amounts of crypto before or after they demonstrate their wallet addresses, it is a clear sign of problems. Stay away. Stay #SAFU“.

Binance and CZ have been in the spotlight since FTX’s dramatic fall from grace. CZ has tweeted that he intends to form a cryptocurrency recovery fund “to help projects who are otherwise strong, but in a liquidity crisis.” The Binance CEO also held meetings with potential backers last week, including with entities affiliated with United Arab Emirates National Security Adviser Sheikh Tahnoon Bin Zayed.

“There are still players with very strong financials and we should band together to try to help the projects in need, especially if it’s only financial need,” CZ said at last Wednesday’s Abu Dhabi Finance Week.

Read more: CZ Says SG “Not Wrong” to Limit Retail Crypto Access… Also “Would Love a License”

Blockhead Team
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