Binance Denies Using Customer Funds For Profit

Cryptocurrency exchange Binance does not use staking Dogecoin (DOGE) and Litecoin (LTC) for third-party lending or other profit-oriented purposes. The company reported this to CoinDesk

“LTC and DOGE are not used in on-chain staking, as they are blockchain-based tokens with algorithms other than Proof-of-Stake. User funds remain with Binance and we apply a very strict risk management approach to ensure their safety,” the statement said.

The company representative also noted that the platform does not use these assets in lending transactions, paying interest on deposits from its treasury. 

On July 19, Binance launched the Locked Staking program for tokens based on the Proof-of-Work (PoW) consensus algorithm, which provides an annual reward of up to 3.1% for DOGE and up to 7% for LTC. 

Since staking is not technically possible in the Dogecoin and Litecoin networks, some users felt that the exchange could use client funds in high-risk strategies to pay interest on deposits, as Celsius Network did.

Some also pointed out that the high yield on deposits poses a threat to the platform’s stability, potentially leading to clients losing funds. 

Binance’s new program provides for a 120-day asset freeze. Clients can redeem positions early, but they will not receive a reward in this case. 

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