Key Takeaways:
- Analysts point out that Binance allegedly props up its native BNB to stimulate market activity.
- Binance refutes these claims by saying that these blockchain movements are natural.
- Since June 2023, Binance has found itself in more trouble by each coming week.
YEREVAN (CoinChapter.com) — It’s already common knowledge that Binance is in a regulatory mess. Notably, the exchange received a lawsuit from the US Securities and Exchange Commission (SEC) on June 5. Since then, Binance’s native token, BNB, has dropped by around 20%.
Nonetheless, the drop includes a short-term recovery — of around 15% when measured from BNB’s local low of $220.60. This rebound coincides with a slew of uplifting news updates in the crypto sector, namely BlackRock’s Bitcoin ETF application with the SEC.
But BNB critics accuse Binance of artificially pumping the token’s price.
Binance, BNB, and Lots of Price Manipulation Accusations
In June, market analyst ’52kskew’ accused Binance of manipulating the BNB market.
Can confirm this is true,
Looks like BTC is being sold off for USDT reserves
USDT reserves are being pumped into BNB aggressively since 27th May
BNB is being sold off for BUSD to suppress volatility in BTC
BUSD is pumped into BTC to suppress downside volatility so BTC can be… https://t.co/yZ4VEtOjuR pic.twitter.com/MIYkLcvfOX
— Skew Δ (@52kskew) June 13, 2023The analyst estimated that Binance had sold its Bitcoin (BTC) holdings for Tether (USDT) and had channeled the proceedings to buy BNB.
Furthermore, 52skew noted that Binance converts its BNB holdings to BUSD, its native US dollar-pegged stablecoin. Then, the exchange converts its BUSD to repurchase Bitcoin and USDT, effectively concluding the cyclical exchange process.
In the analyst’s opinion, these cyclical actions classify as market manipulation.
For reference, market manipulation in the context of cryptocurrencies refers to intentional activities aimed at artificially influencing the price or trading volume of a cryptocurrency or a group of cryptocurrencies for personal gain.
In the case of cyclical exchange manipulation, it typically involves a coordinated effort by individuals or entities to create the illusion of market activity and price movement. That's done by continuously trading the same assets back and forth among themselves.
Further Suspicions
Market analyst ‘JW100x’ also noted that the alarmingly fast sales of Bitcoin serve to preserve BNB’s price as stable as possible. In his opinion, this whole situation resembles a shaky house of cards.
Binance and CZ have been selling spot Bitcoin at an alarming rate, to defend the $BNB $220 liquidation waterfall
As spot Bitcoin is sold off, BNB is purchased, which defends the $220 liquidation but also caps the upside potential of Bitcoin
It is a total house of cards pic.twitter.com/ils8nsQiXd
— JW (@JW100x) June 13, 2023However, Binance refuted claims of any intended effort to keep BNB afloat. Binance CEO Changpeng Zhao claims that anybody can track chart movements.
4. Binance have not sold BTC or BNB. We even still have a bag of FTT.
It is amazing they can know exactly who sold based on just a price chart involving millions of traders. FUD. 🤷♂️ pic.twitter.com/M3MUH2bFRE
— CZ 🔶 Binance (@cz_binance) June 13, 2023Some Interesting On-Chain Movements
Analysts at Lookonchain pointed out an interesting movement of funds on July 11, 2023. Through their tracking efforts, they discovered that a massive whale deposited about $35 million worth of BNB to Binance.
A giant whale deposited 141,835 $BNB ($35M) to #Binance 3 hrs ago through 4 Binance deposit addresses.
The whale may participate in the Arkham (ARKM) token sale.
Due to the purchase cap of 300K $ARKM, the whale deposited $BNB to 4 Binance accounts in order to buy more $ARKM. pic.twitter.com/9hlSCPLlKj
— Lookonchain (@lookonchain) July 11, 2023The platform reports that these transactions were conducted through four Binance deposit addresses. However, it also notes that the entities behind the transactions could be non-Binance entities, mainly individuals that may want to participate in the Arkham (ARKM) token sale round.
ARKM has a limited purchase cap of $300,000 per account, meaning individuals could use multiple accounts to bypass the limitation.
Yeah you simply inflate your fake in house currency, pay your employees in that and internally encourager them to “only ever sell half”
Then you run constant launchpool lockups to keep it mark to market high… right? https://t.co/IUopura4UN
— Adam Cochran (adamscochran.eth) (@adamscochran) July 11, 2023
