Binance Acknowledges Past Flaws in Maintaining Stablecoin Backing
- Blockchain analyst Reiter had flagged gaps in Binance-peg BUSD
- Binance says earlier ‘operational delays’ have now been fixed
Photographer: Jason Alden/Bloomberg
This article is for subscribers only.
Binance Holdings Ltd., the biggest cryptocurrency exchange, acknowledged past flaws in the management of its stablecoin’s reserves which at times led to more than $1 billion in missing collateral, according to one analysis.
The token, Binance-peg BUSD, is meant to have a constant $1 value backed by reserves of BUSD, another stablecoin that is branded by Binance but issued and managed by a separate company, Paxos Trust. Binance signaled that the “peg,” referring to the amount of BUSD locked as collateral to support its own token, had frayed in the past but is now intact.