Former SEC official John Reed Stark stated that Binance’s financial situation is even more uncertain than FTX.
Stark, the former head of the US Securities and Exchange Commission Internet Enforcement Office, believes Binance’s finances are more “opaque” than FTX.
According to Reuters, analysis of the crypto giant’s corporate files revealed that very little is known about Binance.
The company’s cash reserves, profits and revenues have not been transparently disclosed by Binance. The exact location of the exchange, which processes an estimated $22 trillion worth of crypto this year, is also unknown.
Binance does not share information about the role of its native token, BNB, on the balance sheet, or its exposure to risk, while allowing customers to margin trade the borrowed funds.
Files from Binance’s subsidiaries reveal that few details were given about the company’s overall business structure, operations, and how Binance.com moves funds between itself and its many subsidiaries. According to these files, Binance’s worldwide establishments only serve as “window decorations” and do not carry out any activities on their own.
Mazars, the audit firm that published Binance’s proof-of-reserve report, announced that it will suspend working with crypto companies going forward.
