BREAKDOWN: How Big a Deal Was Binance’s Previous $1B BUSD Collateral Gap?
CoinDesk Podcast Network
CoinDesk
4.8 • 689 Ratings
🗓️ 13 January 2023
⏱️ 15 minutes
🧾️ Download transcript
Summary
The company admitted to some process challenges in the past, but says things are fixed now.
Today on “The Breakdown,” NLW catches up on some crypto cleanup stories from earlier in the week. He looks at community reactions to research uncovering that at times in 2020 and 2021 Binance peg BUSD was undercollateralized by as much as $1 billion, as well as to the latest fire and fury around Silvergate Bank.
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“The Breakdown” is written, produced by and features Nathaniel Whittemore aka NLW, with editing by Rob Mitchell and research by Scott Hill. Jared Schwartz is our executive producer and our theme music is “Countdown” by Neon Beach. Music behind our sponsor today is “Swoon” by Falls. Image credit: Antonio Masiello/Getty Images, modified by CoinDesk. Join the discussion at discord.gg/VrKRrfKCz8.
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Transcript
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| 0:00.0 | Welcome back to The Breakdown with me, NLW. |
| 0:09.1 | It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. |
| 0:15.3 | The breakdown is produced and distributed by CoinDesk. |
| 0:20.5 | What's going on, guys? |
| 0:21.6 | It is Friday, January 13th. |
| 0:23.6 | Uh-hoo, Friday the 13th. |
| 0:25.6 | Hope nothing bad happens. |
| 0:27.6 | Anyway, today we are talking about the hits that keep on coming in crypto. |
| 0:31.6 | But before we get into that, if you are enjoying the breakdown, |
| 0:34.6 | please go subscribe to it, give it a rating, give it a review, |
| 0:36.6 | or if you want to |
| 0:37.8 | dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the |
| 0:42.2 | show notes or go to bit.ly slash breakdown pod. All right, folks, happy end of the week. So like I said, |
| 0:48.7 | today we are digging into some more big revelations from the crypto space over the past week |
| 0:52.9 | or so, and we are going to |
| 0:54.4 | start with Binance. A report from Bloomberg on Tuesday revealed that Binance's BUSD |
| 0:59.6 | stablecoin had become under-collateralized by at least $1 billion on three occasions across |
| 1:05.8 | 2020 and 2021. Now, for background, BUSD operates across multiple blockchains. The Ethereum version of the |
| 1:12.2 | stablecoin is fully collateralized by a process overseen by U.S. regulated stablecoin issue |
| 1:16.6 | or Paxos and maintained its reserves at all times. At the same time, however, the BUSD, which |
| 1:22.0 | operates on Binance's BNB smart chain protocol, had its collateral maintained by an opaque internal |
| 1:27.2 | process at |
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