Yunus Taşlı 
Could Binance Go Bankrupt? The question of whether Binance can face bankruptcy might be one of the most significant inquiries for such a large company.As of January 2023, Binance has a trading volume of 6,116,674,909 dollars, making it the largest crypto exchange. Most experts now think they are too big to fail. However, this was questioned following the chaos after the decline of FTX and Alameda Research this year.
FTX CEO Sam Bankman orchestrated this crypto scandal, stealing crypto assets worth 8 billion dollars from crypto investors using his own platform. This event marked an unprecedented occurrence in industry history, constituting the largest fraud case perpetrated by a crypto exchange. The FTX fraud sent shockwaves through the entire crypto market, but it gave the crypto community a list of invaluable lessons.
Despite the market burning around them, Binance managed to emerge from hell with only a few scars. One of the most memorable attacks on Binance was the 2022 attack where computer hackers stole crypto assets worth 250 million dollars. This incident is quite similar to the 2019 attack, which cost the exchange 40 million dollars.
In light of the turbulent events of 2022, Changpeng Zhao (CZ), decided to join Binance’s last AMA live talk of 2022 to discuss any remaining questions or concerns as entering the new year and stepping into the recovery market in 2023.
After crypto traders and investors lost about 100 million dollars worth of cryptocurrency, it would be correct to assume that many are looking askance at central crypto exchanges, even if they can recover some of their digital assets. This is a view also expressed by Wolf and HodlDee, leading names in crypto trading; the former prefers spot exchanges, the latter gives up on exchanges entirely. The distrust in crypto exchanges has led to a significant increase in cold wallet purchases.
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Are Crypto Exchanges Still Worth the Risk?
When such a question as whether Binance can go bankrupt comes to mind, it is important to understand that nothing is completely safe, and risk management is an essential skill when we wonder if it still makes sense to trust these exchanges. There are different ways to hold your crypto, such as using your own wallet and following certain security measures.
Trust is very important when using a centralized exchange like Binance.Users gain this trust over time by experiencing repeated actions and tests. Exchanges that users have trusted with their money for a longer time may have an advantage. There are no shortcuts to earning user trust.
“If you don’t own your keys, you don’t own your coins.”
The above thought is common among the crypto community due to the increasing distrust in centralized exchanges. It is always recommended that individuals hold their own money in a wallet if possible, as this can provide an additional layer of security. Binance offers options like Trust Wallet and hardware wallets for this purpose, but it is important to understand the risks associated with each approach.
Will Binance Go Bankrupt?
According to CZ, this won’t happen. Binance boasts a fundamental differentiating factor that FTX does not have.
“We have more than 100% reserves for every cryptocurrency we hold on behalf of our users. So, feel free to withdraw whenever you want.” – CZ , CEO and co-founder of Binance.
Despite the negative reaction of the crypto market to mass withdrawals from Binance, the Binance team assures its users that they should always be able to withdraw their funds from the Binance exchange. During a 24-hour withdrawal frenzy inspired by fear and sponsored by FTX, they proved this to be true from December 12-14, 2022, when users withdrew nearly $3 billion from the exchange. This confirms Binance’s claim that it backs crypto assets at a 1:1 ratio.
While not guaranteeing Binance’s eternal status in the crypto world, it’s reassuring that the platform consistently protects investors. Binance encourages users to verify accounts, promoting secure transactions. This longstanding encouragement by the Binance team ensures exchange privacy and security.
Why is Binance Far From Bankruptcy?
The first and even the only reason is that Binance, unlike other centralized cryptocurrency exchanges, has its own fund. The name of this fund is SAFU. The SAFU fund was over $1 billion in the bull market, but has now declined to $700 million. This is due to the decline in cryptocurrency prices. So, no expenditure has been made from the SAFU funds. These funds mainly consist of Bitcoin and BNB cryptocurrencies. The fund includes $432 million worth of Bitcoin and $287 million worth of BNB. In addition, $100 million worth of different cryptocurrencies are also included in the balance of this fund.
You can see these funds in the images below. Furthermore, Binance CEO CZ confirmed the data of these funds on the chain via his Twitter account.
Resource: Blockchair.com
Resource: bscscan.com
As seen in the images above, Binance can easily protect itself even in any possible bankruptcy situation. In addition, even the monthly revenues of Binance exchange are enough to refund users when it goes bankrupt. Currently, despite the bear market, Binance exchange has approximately $1.9 billion in daily trading volume, far ahead of other exchanges.
As you know, exchanges charge users a commission fee. Binance, despite charging much less commission than other exchanges, has a revenue of over $30 million a month.
In addition to all these, Binance exchange also offers discounts on commissions to its users. If you hold BNB in your portfolio, you pay 25% less commission. In addition, if you are a follower of Coin Engineer, by using our discount registration code, you earn a 20% commission fee rebate.
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