Binance Hit by FUD, BNB Price Has Dropped!

Amid FUD and concerns over Proof of Reserve and US Attorney lawsuits, native coin, Binance (BNB) has been on the decline.

Earlier, reports from Reuters US prosecutors want to sue cryptocurrency exchange Binance for alleged money laundering and sanctions violations.

At the time of writing, BNB was trading at $266.45 as of 4:25 PM ET, and has lost 5.46% over the past 24 hours, according to CoinMarketCap data, Tuesday (13/12/2022).

Meanwhile, data from DeFiLlama shows that the total value locked in the Binance Service Chain (BSC) DeFi protocol fell 4.5% over the past 24 hours, sourced from Coindesk.

Although BNB has been weighed down by the general correction of the crypto market and the fallout from the crash of the FTX exchange, the latest correction comes after the new legal issues that Binance is facing.

BNB Drops On Proof of Reserve Concerns

Fear, Uncertainty, and Doubt (FUD) around Binance is partly due to Binance’s Proof of Reserve (PoR) report released by the audit firm Mazars does not give investors confidence regarding Binance’s finances.

According to many investors there is a lack of information regarding the quality of internal controls and how Binance’s system liquidates assets to cover margin loans. This also had an impact on the net outflow that came out of Binance of US $ 902 Million (Rp. 14 trillion).

The figure is almost nine times higher than Bitfinex, which had the second highest net outflow during the period.

Binance Legal Issues in the US

The Reuters report indicates divisions among Department of Justice (DOJ) officials over allegations of suing Binance for a range of offences, including unauthorized money transfers, money laundering conspiracy, and criminal sanctions violations.

However, some of the prosecutors involved in the case believe that more evidence needs to be gathered before a criminal case can be initiated.

Binance has debunked the report noting that Reuters attacked its law enforcement team.