It helps to have a giant red herring that isn’t directly related to a liquidity or solvency problem. In Binance’s case, it’s their incredibly dubious USD banking arrangements. It’s not a secret, and it’s a great distraction for Binance to point at if they don’t want to move real USD at any given time.
Noone outside of Binance knows the real situation.
It shouldn't come as a surprise that lack of transparency doesn't exactly exude a lot of confidence and trust --- even though it took way too long for this realization to materialize.
My guess is that binance is technically insolvent (negative net assets) but not yet factually insolvent (still able to meet day-to-day liquidity needs), and without a major turn in the crypto market, has no chance of rectifying their technical insolvency, and are playing for time with regards to their factual insolvency.
They claim most of their money is not with banks (number 1 is supposedly commercial paper). Also what is with banks certainly isn't with American ones. But this goes back to the point earlier about users having no idea about the reserves. No one should use Tether and I don't trust Binance for a second, pretty sure they trade against their own users. But it's also more resilient than many think, including people who are in crypto. Binance isn't well trusted by insiders and whales. But they have a lot of customers, especially in developing countries less served by more reputable exchanges and banks. And since they offer USDT, USDC as well as their own stablecoin, whatever that's backed by, it would not be catastrophic for them even if one of the stablecoin issuers went down.
Binance, the largest crypto exchange of them all, has huge USDT holdings and is widely reckoned to be in deep trouble. However, they can't dump it without wrecking the market in the process.
One of the famous SBF screenshots showed Binance's CEO deeply concerned about someone selling US$250k (not M! K!) USDT, because they were afraid that might upset the apple cart, even though USDT is notionally backed by $68B of assets.
So let's imagine that Binance has $4B of USD customer liabilities backed by $2B of USDC and $2B of BUSD. Fully solvent and fully liquid. Then customers try to withdraw $3B of USDC which Binance does not have. Binance would be happy to give you BUSD but for whatever reason customers specifically want USDC.
(I am absolutely convinced that Binance is evil but this specific situation does not appear particularly bad.)
Binance has been halting withdraws on various coins for BS reasons for a while now. The jig has been up for a while, just not everyone is paying attention.
I think the article was suggesting that the volume of trading exceeded the store of assets on Binance.US and as such required funds be transferred from Binance proper because it had a much better volume:exchange ratio.
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