Like FTX, Binance discloses limited financial information. It doesn’t say where the company is based. And its founder, Changpeng Zhao, is affiliated with market makers providing liquidity on its own platform, an arrangement some market observers say leads to a potential conflict of interest.
“Does the exchange give preferential treatment to an affiliate? Is the exchange supporting an affiliate with customer money? These questions concern customers and the regulators who try to protect them,” said Larry Harris, a finance professor at the University of Southern California’s Marshall School of Business and former Securities and Exchange Commission chief economist.
“When a business is not transparent and not regulated, we have no true understanding of what is happening inside,” Prof. Harris said.
Source: Crypto Giant Binance Offers Little Transparency After FTX Collapse – WSJ