Binance crypto lending services have been announced for just a week now and the one of the world’s largest cryptocurrency is facing criticism for it and in the altcoin news below we find out why.
The now controversial crypto platform got many negative comments because some analysts and traders don’t think that the services will be best for the crypto ecosystem. In the latest move to increase the growing monopoly in the crypto services industry, Binance announced a crypto lending platform which will be initially launched on August 29th and the service will allow the users to lend out their holdings for fixed periods of 14 days and gain a passive income from the interest. The announcement also explains that there will be annualized interest rates for crypto assets with its own native token BNB of course, offering the highest interest rate.
The crypto community reacted on the Binance crypto lending services and stated that CZ is only trying to dominate the industry by hovering up as many customers as it can. Offering the fixed internal rates is not so common in the financial industry and could even cause problems down the road mainly when one of the proposed interest payment options is in the controversial USDT or Tether token. The research director Larry Cermak explained exactly that, saying that by offering guaranteed rates of return is never a good idea because there are already comparisons made of the proposed platform to the Bitconnect lending scam which was folded in January 2018. Some of the responses noted:
“I did not know that @cz_binance is so desperate to try to make us keep his coin … once binance is out from us #BNB will crash so hard that ppl will start starving and they will also ruin his family i think is time to create a blog about all this ponzy scams!”
It is highly unlikely that Binance is a scam but the new lending scheme does appear to be just another attempt by the company to get the people to hodl the Binance Coin. Another aspect is that the industry sees the encouragement to keep the funds locked up on a centralized exchange that has already been through a massive hack this year. Binance has its SAFU for insurance against such things but in the reality is just one big bank that has the access of all of the keys. Binance also has the ambitions to be the provider of the world’s stablecoins built on its own blockchain in order to surpass Facebook’s Libra. The company has no inhibitions at the moment and is on track to become the dominant factor in the industry as we already know thanks to the reports in the latest cryptocurrency news.
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