WhiteBIT and FUD. Like the children of the Digital World, we are fully used to facing new technologies and progress from one side, and the new problems and difficulties that this world carries within it from another. This week, I made an investigation into Fear, Uncertainty, and Doubt, or simply FUD.
It can scare whole companies and corporations, moreover, it can confuse traders or distrustful users who are afraid to even buy Bitcoin. It can also cause a wave of negativity and significantly affect reputation. But the catch is that it only works if the company or legal entity does have some kind of machinations or fraud of any kind. In the other cases, FUD remains FUD.
Definition
FUD is simply an acronym that stands for Fear, Uncertainty, and Doubt. The crypto community frequently and publicly denounces FUD. FUD includes “false news,” erroneous analyses, and prejudicial viewpoints that are spread regarding cryptocurrencies or the market in general.
Inaccurate information, hyperbole, and frenzy are frequently used in FUD. Crypto industry participants claim that FUD is being propagated at key junctures to drive prices down.
Some Examples of FUD in Crypto
Below are some popular FUD that spreads in the crypto community.
- stating that a cryptocurrency is about to be removed from a major trading platform.
- accusing cryptocurrency of being a Ponzi scheme.
- claiming that only criminals utilize cryptocurrency.
- claiming that regulatory authorities are taking cryptocurrency enforcement action.
- worry that governments will outlaw cryptocurrency.
- uncertainty regarding cryptocurrencies’ future or the impending collapse of the crypto market.
- spreading false information that a team is disbanding or a project is ending.
We’ll observe most of these points in the following investigation.
WhiteBIT Faced the Media FUD
Three days ago, one of the largest European crypto exchanges — WhiteBIT — that have a partnership with FC Barcelona and collaborations with VISA faced extensive media FUD. The following information was provided from the first source:
“An obscure exchange with curious ties to Justin Sun, WhiteBIT, is currently advertising a nose-bleeding APY of 24.8% to customers who deposit Tether (USDT) for a year on its lending platform. Tether has been interchangeable for $1 worth of bitcoin for over eight years.”
Since the release of this article, chaos began on social media. Editors who didn’t even read the article started to use the copy-paste mechanism for their media showing the complete lack of professionalism and objectivity.
But I read it. I read it very carefully, analyzing every sentence and trying to read the meaning of the author’s language. When I finished reading the article, it only took 3 minutes for me to realize that it was FUD.
Let’s observe the 5 essential points of why it’s a clear FUD
1. Crypto Lending
The first sight that catches the eye is the fact that staking as a product exists on the WhiteBIT exchange for years. On WhiteBIT, the tool is called Crypto Lending. According to the official exchange’s blog:
“ Crypto Lending is a WhiteBIT product, which allows receiving interest from the long-term and short-term storage of digital assets on the platform. Each plan presupposes the accrual of a certain percentage.”
The period and current interest rates on WhiteBIT:
Staking is a procedure in which crypto owners voluntarily participate in validating blockchain transactions or making sure that the ledger totals up. According to its technical characteristics, it operates in a bundle of margin terminals.
The blockchain network’s computers, sometimes with the help of third-party staking services, perform the checking rather than human beings.
I’ve been going over all the steak records for the last two years, you know what? Apart from a few questionable comments on the review sites, I have not found any media outlet that has expressed suspicions about this product.
Don’t you think it’s odd that the information about the suspicious staking just started spreading now? Yes, it is. And it raises many questions at once. Why was the mechanism of the staking itself not described, since it is a scam? Where is the updated information about the second change in Crypto Lending rates? Because since March, this year, the rates have been reduced.
And according to the WhiteBIT news, the percentage for storing digital assets in Crypto Lending will also be modified beginning August 21, 2023.
This way, why did the source not provide information on interest rate changes and further possible updates? From all FUD examples, “uncertainty regarding cryptocurrencies’ future or the impending collapse of the crypto market” would be the most suitable for the first observational point.
2. Unverified information
Secondly, the article has a statement that,
“As is common in the crypto exchange, WhiteBIT has pursued sports sponsorships, including Football Club Barcelona, Ukrainian Football Club, and the Valencia Marathon. FC Barcelona quickly dropped that sponsorship, although WhiteBIT still lists it as a ‘sponsor’ on its website.”
Look at the link from the article, it refers to an irrelevant publication of 2022. Disinformation like this is very easy to check. Firstly, WhiteBIT is still on the list of the Official Partners of FC Barcelona:
And secondly, the official statement of the vice president of marketing at Barcelona, Juli Guiu:
“We are pleased to announce this new partnership, another example of the club’s commitment to innovation, additionally, this is a partnership that will help us to continue growing and developing our global commercial expansion strategy, strengthening the club further while remaining a benchmark in an increasingly competitive field.”
3. Timing
One of the most suspicious points seems to be the fact that the release of the article occurs at the same time as the release of Launchpad on the exchange. Just think about it, the big project for the company, the same day and almost the same time. Looks like someone paid for a share and an advertising article that lacks objectivity and verified information.
4. Technical inconsistencies
In the article, we see the information about supported fiat currency by the exchange. It claims that: “WhiteBIT boasts over 150 crypto trading pairs and — far more importantly — supports two exotic fiat currencies: the Ukrainian hryvnia and Kazakhstani tenge.”
The reality is WhiteBIT offers over 270 assets and over 350 trading pairs as seen on the official website.
5. What does Justin Sun have to do with it?
Even more absurd and most illogical is the fact that the article mentions Justin San, the founder of Tron.
“Although that 24.8% is five times the average USD money market rate — a red flag if there ever was one — WhiteBIT has a variety of connections to Justin Sun and his Huobi exchange. Funds flow frequently between WhiteBIT and Huobi. Those connections make that APY figure slightly less remarkable, although no more reassuring.”
All crypto exchanges are linked by transaction flow. Except for the on-chain data showing transactions between WhiteBIT and Huobi, there are no other arguments and points of connection. I was really surprised by such a collection of disinformation, which further increased the likelihood that the article was ordered.
6. WhiteBIT Security
The article also notes doubts about the security of the exchange:
“Like all crypto exchanges, WhiteBIT has struggled to maintain its licenses and banking relationships long-term. Already, its two European licenses from 2019 return 404 Not Found errors. WhiteBIT has also delayed withdrawals many times(actually, there is the link that leads to the article from 2019)”
“Like many exchanges, WhiteBIT has occasionally been a target for criminals seeking to liquidate their illegally-gained digital assets.”
I will not start a long argument as to why this is so “far-fetched” or protect the exchange, because all crypto exchanges sooner or later always face some problems with withdrawal or become subject to various types of hacks.
But after reviewing all the security data of the exchange, I came to the conclusion that regarding other crypto exchanges, which are constantly victims of hack attacks and fund theft, WhiteBIT is at a fairly good level of security. The company runs a public bug bounty program at HackenProof.
WhiteBIT has AML Checking to help detect and prevent cryptocurrency transactions associated with illicit activities. The authors didn’t even bother to check the WhiteBIT User Agreement where they could find all the information on the essential terms and conditions of a public offer of the company.
My experience:
This winter, I started to check the passive income option on numerous crypto exchanges. I tested it on Kraken, Coinbase, Huobi, Binance, and WhiteBIT (to my delight, this information has been useful to me now).
I decided to avoid the risks with BTC and the high volatility at that time with ETH, so I chose the USDT for 90 days. And it was completed successfully.
Conclusion
In the crypto sphere as in life — “Trust but verify.” You need to act on this principle, namely, to conduct a detailed technical analysis and check all questionable aspects before spreading information via social networks. Actually, if you check all questionable aspects and suspicious information, FUD becomes not as scary as it is presented.
By the way, after accelerating FUD, the company officially responded to it with reasons challenging all the information in the article, explaining to its users and all the media that the article is a pure media attack. By doing so, acting correctly from the point of view of PR and at the same time honesty and transparency in relation to their audience. Do your own research and make the conclusion then.