Binance withdraws its votes in Steem blockchain takeover

Written by: Ali Raza
April 10, 2020
  • Three exchanges — Binance, Huobi, and Poloniex — recently came under fire for an attempted takeover of the Steem network.
  • Since then, Binance's CEO announced that Binance would withdraw its votes, and Justin Sun confirmed that he will do the same.
  • The community was particularly displeased with the move, as it seems that the exchanges used their own clients' deposits to power their votes.

While the week has only started, there was already a major event in the crypto space that has caused quite a bit of an issue. As some may know, Steem, blockchain on which the popular decentralized blogging platform, Steemit, is built, recently went through what appears to be a hostile takeover by several exchanges, including Binance, Huobi, and Poloniex.

According to some reports, the exchanges allegedly mobilized customer deposits in order to vote in regard to an upcoming upgrade/hardfork.

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Since then, the exchanges came under fire for the move, which caused Binance CEO, Changpeng Zhao (CZ), to announce that Binance will remove its vote that allegedly contributed to a single account —  @dev365 — which is believed to be owned by TRON’s Justin Sun.

https://twitter.com/cz_binance/status/1234676941111742467

Zhao announced that he was aware of the upcoming upgrade, and that he approved support for it.

https://twitter.com/cz_binance/status/1234565384327585792

However, he stressed that Binance usually simply remains in a supportive position. Meanwhile, Justin Sun himself announced that his votes will be withdrawn, trying to reject what he calls ‘misleading comments.’

Sun continued by claiming that the intention was not to take over the network, only to protect the sanctity of private property and the interests of all from ‘malicious hackers.’

Steemit official resigns in protest of the takeover

The move, which many are now openly calling a coup, revolved around staking large amounts of STEEM tokens that would be used for voting in support or for the removal of the network’s ‘witnesses.’ However, the exchanges seemingly betrayed their users’ trust by supposedly using their deposits to do so, while claiming that withdrawals are simply delayed.

https://twitter.com/TheycallmeDan_/status/1234560997169364992

As a direct response to the move, Steemit’s head of communications, Andrew Levine, decided to resign out of protest.

Another thing to consider is that Steemit was recently purchased by TRON, which announced that the platform will migrate from Steem blockchain to the TRON network.

By purchasing the whole company, Sun also became an owner of a massive amount of tokens that includes around 20% of Steem’s supply. As a response, Steem’s now-former witnesses attempted to do a soft fork that would freeze Sun’s tokens and stop him from using them.

However, yesterday, March 2nd, Steemit team stated that they would mobilize the tokens so that the voting can take place and the order would be restored to the community.

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