Binance explained to Mithril, a recently listed project, that a clause in their contract entitles it to Mithril’s initial insurance deposit.
Recently listed Finance Social networking project Mithril (MITH) has asked the exchange to refund its initial insurance deposit. Mithril claimed to have deposited 200,000 Binance Coins (BNP) now have to withdraw them as insurance to list on Binance. However, the apparent CEO of the exchange Changpeng Zhao It recently came out to address those claims and further clarify the listing terms.
Sharing the screenshot Zhao explained on Twitter that in the finance agreement with Mithril, the exchange has the right to deduct insurance funds. According to the Binance CEO, the deductible can be a partial amount or 100% of the insurance fund as an additional fee. Zhao further explained that if MITH’s listed token price falls below a certain threshold, this rule will be activated. A Twitter message accompanying Zhao’s screenshot post read:
“I reviewed this after seeing your post. Here is the contract clause for your (and the community’s) reference. We usually maintain confidentiality until you break it. The insurance deposit is there to encourage builders to continue building.
Additionally, Binance CEO continued:
“Your token price is below trigger levels. Reading comments. Your website is offline. You haven’t tweeted or updated your community for almost 2 years. I believe our team made the right decision and acted fully within our rights to do so. Regards.”
Zhao’s reply tweets came today.
Crypto Community Weighs In On Finance Twitter Exchange With Listed Mithril
Zhao’s Twitter exchange with Mithril did not go unnoticed by the larger Twitter community. Some observers pointed out that the listed crypto project was essentially non-existent when it was on Binance. These observers considered the listed insurance fee of 200K BNB ($2 million) a small price to pay for Mithril’s inaction. Compared to the current market value of the crypto project of $53 million, the ‘listed amount’ at the time of deposit is favorable.
However, the rest of the spectrum of the crypto community questioned Binance’s commercially driven approach regarding the initial listing. These observers do not think it is fair for the main exchange to require security insurance in BNB from projects seeking to list on the exchange. Also, a Twitter user Finance’s focus on listed prices was questioned. According to this observer, such attention could force schemes to artificially raise prices every time they fall below the “stimulus price”.
The user added that market conditions can sometimes devalue the token. However, artificially inflating prices when this happens indicates a manipulated and dishonest environment.
As of press time, Binance has yet to address any of these viewer concerns regarding listed Mithril.
Finance Proof-of-Reserve Audit Stokes Concerns
Meanwhile, Binance’s proof of balance audit has been the subject of much debate in the financial industry. A number of financial experts have recently chimed in Concerns about the company’s published audit. However, crypto analytics firm CryptoQuant recently tried to dispel doubts by saying that Binance’s balance doesn’t match the on-chain data. FTX.