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Binance’s BNB Token Nosedives Amidst FTX Connection And Investigation

Binance’s BNB token has dropped by about 15% within a week following the crypto’s exchange troubled period in relation to collapsed FTX.

BNB is the most valuable native token by a company and it is the fifth most valued cryptocurrency, behind bitcoin, ethereum, tether and USD Coin. However, since the investigations it is facing and its ties to FTX, the exchange has had to weather storms left and right.

Although CEO Changpeng Zhao or CZ continues to dismiss concerns as nothing but a tactic to cause people make ill-advised financial decisions (FUD), investors are beginning to worry.

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For one, Binance could have to pay back the $2.1 billion it got from FTX last year for exiting its equity position as its first outside investor. The amount is not enough to rock the financial stability of Binance, as its boss said that they will be okay.

Also, FTX crash led federal investigators to start digging into how Binance could handle a potential critical financial problem and as the company has shown, it holds assets in custody and does not use customers funds for investments. Its spokesperson said that the company’s revenue is entirely reliant on transaction fees.

Despite the assurances and the resemblance of stability, investors are still in doubt because FTX’s Sam Bankman-Fried had exuded similar confidence in the future of his crypto exchange just days before its crash. Binance had also attempted to save FTX before backing out a day later citing concerns about other things it had discovered.

Binance’s native token, BNB, had been valued at over $300 sometime in November but is now about $231.

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Onwuasoanya Obinna

A reader of books and stringer of words. Passionate about Science and Tech. When not writing or reading he is surfing the web and Tweeting.