Binance Doubts Coinbase Reserves; Firm Hits CZ Over FTX Mess

The world’s two largest cryptocurrency exchanges are at war, with Binance CEO Changpeng “CZ” Zhao questioning the robustness of Coinbase's (COIN) reserves after CZ dumped his bid to buy FTX and let the exchange collapse, Brian McGleenon reported for Yahoo Finance UK.

Photo Insert: Armstrong tweeted back in defense: "If you see FUD out there — remember, our financials are public (we're a public company)."

CZ called out the world's second-largest crypto-exchange over its reserve assets, raising doubts on its financial stability just days after announcing he had walked away from buying Sam Bankman-Fried’s FTX, causing a run on the exchange and forcing it to bankruptcy.

On Tuesday, Zhao said on Twitter: “Coinbase Custody holds 635,000 BTC (BTC-USD) on behalf of Grayscale. 4 months ago, Coinbase (I assume exchange) has less than 600K." Zhao provided a link to a 4-month-old article from Bitcoinist stating Coinbase only had 600,000 BTC.

He retracted his statement after Coinbase CEO Brian Armstrong hit back strongly.

Zhao retreated, made it clear that he was simply quoting “news reports,” and not making any claim of his own. However, Armstong dismissed his tweet as "FUD" (fear, uncertainty and doubt).

Armstrong tweeted back in defense: "If you see FUD out there — remember, our financials are public (we're a public company)."

The Coinbase CEO backed up his response by revealing the totality of Coinbase's bitcoin reserves. Armstrong added: "We hold ~2M BTC. ~$39.9B worth as of 9/30 (see our 10Q)." Coinbase is expected to stage a counterattack to CZ as observers said the Binance CEO may be out to run Coinbase down to the ground.

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