I read today the letter from BINANCE CEO mentioning that Binance SAFU fund is worth $1.2 billion as of the end of the year. So I checked myself the wallet address https://bscscan.com/address/0x4B16c5dE96EB2117bBE5fd171E4d203624B014aa and found out that $433 million out of the $1.2 billion i.e. more than one third are BNB tokens...
Unfortunately, there are some similarities with FTX situation. According to various sources, FTX held a significant portion of its reserves in FTT tokens before its collapse in November 2022. Estimates suggest that FTX controlled around 80% of the total FTT supply, which was approximately 350 million tokens at the time. This concentration of FTT ownership within FTX itself made the exchange vulnerable to price fluctuations and market manipulation.
Just like FTX, Binance holds a considerable amount of BNB tokens, accounting for more than one-third of its reserves. This concentrated ownership could expose Binance to similar risks, particularly if BNB's price experiences a significant decline.
A sharp drop in BNB's value could directly impact Binance's reserves, potentially making it difficult to meet customer withdrawals and maintain financial stability. Moreover, a falling BNB price could erode Binance's profits and hinder its ability to invest in growth and innovation.
Therefore, the recent surge of BNB price is not really good news, since it increases the exposure of Binance to its BNB token.
Disclaimer: This is not financial advice. Please do your own research.
