Changpeng Zhao: “People can withdraw 100% of the assets they have on Binance”

Changpeng Zhao gave an interview to CNBC in which he refuted people's assumptions about Binance's lack of liquidity.

According to the owner of the largest cryptocurrency exchange, all clients always have access to their funds and can withdraw them at any time, even if force majeure occurs.

Changpeng Zhao believes that people worry in vain:

People can withdraw 100% of the assets they have on Binance. We won't have a problem on any given day.

The recent large outflow of cash and cryptocurrency assets from the Hong Kong exchange has left the community worried about Binance's liquidity. Also, a recent audit conducted by Mazars made experts in the cryptocurrency world doubt how correctly the audit was carried out.

The head of Binance said that the exchange, unlike other sites, reserve funds are stored in a one-to-one ratio with client funds. Other venues are known for using a fractional reserve banking model. In other words, only part of the deposits are stored there, which deprives full liquidity.

Changpeng Zhao also noted the resourcefulness of cryptocurrency experts who questioned the full verification of the Binance exchange. He honestly admitted that the Mazars did not conduct a full financial audit. As a reason, he cited the fear of auditors when working with cryptocurrency exchanges and insufficient knowledge due to the fact that digital assets are a fairly young industry.

The head of Binance also explained the situation with the recent limitation of withdrawing funds in USDC stablecoin equivalent in some blockchain systems. Changpeng said that the problem lay in a New York bank that the Hong Kong exchange uses to exchange Binance USD for USD Coin. At the moment when the withdrawal was suspended, the bank simply did not work:

We have the assets necessary for the conversion. There is no margin, no leverage, we just needed the banks to open. When they are closed and you are trying to withdraw money, it does not work.

The CEO of Binance also noted that the company does not have any loan commitments, and also has not previously provided loans that have not yet been repaid.