Ninth Binance Burn Leads to Questions of Exchange’s Methods

The ninth quarterly burn of Binance platform coin BNB has taken place and raised eyebrows in some quarters, with questions being asked about where the Malta-based exchange is getting its numbers from.

In its white paper the exchange told readers how there would only ever be 200 million BNB tokens in existence.

The announcement this week said that around two million tokens were burnt in Quarter 3, bringing the running total to 14,525,135 burnt since the process began, and leaving a total of 185,474,865 BNB remaining, but Binance is now being asked to explain why the burn address wallet is displaying 48,461,323 BNB remaining.

Taken together from both sources, Binance seems to have 233,936,188 BNB tokens remaining, a figure that is confusing investors, and one that is out of line with the exchange’s own white paper. It has led to allegations about the exchanges potentially “shady” accountancy and business practices.

So what’s the answer?

Ups and downs

It has so far been a rollercoaster year for Binance, but one with unfortunately more downs than ups. In May, hackers stole 7,000 bitcoin from the exchange’s wallets, while later that year Binance was in the news again, after the private details of its customers, including names, addresses, signatures and photos were leaked online.

On top of that, following its Quarter 2 token burn the exchange faced further criticism after it neglected to burn or buy-back existing tokens as it had promised to do in its white paper, opting to burn tokens held by the Binance exec team instead. 

This has led to allegations that the move would have a long-term negative impact on the price, and at the time of the news BNB shed seven per cent in value.

The news led to Binance’s He-Yi, one of the platform’s co-founders, having to stand up and defend the practice on social media.

Accounting for a slump

Allegations are also being made about just why the most recent token burn accounted for a much higher volume of BNB being burnt off than previous burns, especially given the slump in daily trading volume the exchange witnessed in quarter 3 when compared to quarter 2.

However, despite apparent inaccuracies, Changpeng Zhao, Binance CEO, shrugged off any criticisms in a post on the Binance blog.

“I think (in my biased view) our results out-shine them all. Yet, the price of BNB did decline. Markets often confuse people, even me sometimes,” he said.

“No sweat. Even if I may be confused at times by the price of BNB, our direction for Binance has always been clear. We still very much strive to be the financial infrastructure provider for tomorrow, and work hard to bring the freedom of money to the masses.”

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