Binance reportedly didn’t follow procedures for BUSD reserves in 2020, 2021

Jan. 10, 2023 at 9:38 pm

By Soumen Datta

Binance failed to follow its procedures for BUSD reserves between 2020 and 2021 since it didn’t keep enough reserves to support its BUSD stablecoin, according to a report by Bloomberg.

The mismanagement led to Binance-peg BUSD being undercollateralized three times between 2020 and 2021, with collateral gaps exceeding $1 billion on each occasion, according to data shared by Jonathan Reiter, co-founder of blockchain analytics company ChainArgos.

Furthermore, Reiter analysis demonstrated that the amount of Binance-peg BUSD issued on Binance’s BNB Smart Chain network indicated that the exchange issued new Binance-peg BUSD tokens over the period without locking up the equivalent amount of Paxos-issued BUSD tokens in its Ethereum wallet as collateral.

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