Hedge Fund Manager Warns of Impending Collapse at Binance
A hedge fund manager, whose firm suffered from FTX’s collapse in November, is now sounding the alarm about a potential collapse at Binance. Travis Kling, the founder of Ikigai Asset Management, published a timeline of events that have raised doubts about Binance’s trustworthiness over the past year. These events include the exchange’s withdrawal from certain jurisdictions, layoffs, and lawsuits from US regulators. Kling believes that Binance may have an asset-liability mismatch, similar to what happened with FTX, where the exchange doesn’t have enough assets to cover customer withdrawals. He also suggests that Binance’s alleged failure to segregate customer assets exacerbates the risk of a collapse. Despite the turbulence, Binance has not collapsed, which Kling attributes to the CEO’s personal wealth and the trust of Asian investors.
Response from Binance Executives
Concerns have been raised about Binance following a series of executive departures. However, Patrick Hillman, a former employee, defended the exchange, stating that Binance has the largest market share in the most important crypto markets globally. Binance CEO Changpeng Zhao (CZ) also addressed the negative news and rumors surrounding the exchange, highlighting positive developments such as winning court cases, handling a bank run, and record deposits. CZ reassured users that all withdrawals and deposits are properly handled, and customer funds are safe and reserved.
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