Users have accused Binance of inaction in addressing investors’ concerns at the PopcornSwap project, which carried out an exit scam. At current prices, the losses amount to about ~$15 million.
“Binance, one of the world’s largest cryptocurrency exchanges, is displaying extremely troubling conduct that contradicts its stated principle ‘customer first,’” wrote a community member under the pseudonym Neonmatrixbox.
In January 2021, the DeFi project team on Binance Smart Chain misappropriated 48,000 BNB (~$2.2 million at the time). The exchange froze these funds but did not attempt to compensate the losses to the victims. According to Neonmatrixbox, the lack of action was due to their centralised nature, which contradicts Binance’s proclaimed principles.
“This shows that they intervened selectively in on-chain transactions as a centralised authority, and when they did so, they did not follow the path to obtain full authorisation,” the investor noted.
According to him, the exchange has not reached out regarding the incident for the entire time. The group of victims tried to obtain answers, contacting customer support, directly to Binance CEO Changpeng Zhao, engaging reputable lawyers and through other channels.
Investors believe the exchange has all the means to return the stolen funds. The platform has a BNB burn mechanism, through which the blocked coins can be destroyed and then reissued to compensate the losses.
Neonmatrixbox noted that PopcornSwap users themselves conducted an audit, determining the exact number of victims and the amounts due to them. Binance does not need to conduct its own investigation, he added.
“As a positive note, it is worth noting that Binance did indeed freeze the wallet and BNB when a major hack occurred, which is a positive step. However the subsequent silence and lack of communication regarding the blocked BNB raise concerns. We deserve answers,” Neonmatrixbox said.
He stressed that Binance’s ability to halt the network “raises questions about intentions and transparency that regulators and the community should be aware of.”
As reported, in the first half of 2023 the crypto industry’s losses from hacks and scams amounted to around ~$655.6m.