Is Binance using customer tokens to manipulate Uniswap?

Hayden Adams, the inventor of Uniswap, has accused crypto giant Binance of using its customers’ UNI tokens without their knowledge. Binance is accused of delegating its customers’ tokens, which could theoretically be used to influence governance votes of Uniswap’s decentralized organization (DAO). Specifically: Binance should be able to use the delegated UNI tokens of its customers to influence the further development of the decentralized exchange. The problem, however, is that customers don’t know about it.

According to Hayden Adams, Binance has delegated 13 million UNI tokens for voting. Binance holds with that 5.9 percent of the voting rights within the Uniswap DAO and is thus the second largest holder of voting rights within the decentralized organization (DAO) of the DEX after the venture capital firm a16z.

However, since these tokens technically belong to Binance customers and not the crypto exchange itself, Adams has now accused Binance of using the UNI tokens without users’ knowledge.

Binance denies the allegations of the Uniswap founder

The response from Binance CEO CZ was not long in coming. wrote on Twitter the CEO of the largest crypto exchange:

UNI were only transferred between internal Binance wallets, which made them automatically delegated. However, we do not intend to use our users’ tokens in UNI DAO governance votes.

Binance CEO, CZ.

CZ made it clear: its exchange does not use user tokens to influence UNI DAO decisions. Adams would have misinterpreted the situation. However, why Binance is delegating the tokens in the first place, despite the exchange not planning to use them in governance votes, is unclear.

Adams then admitted his misinterpretation. Further, the DEX founder explained that Uniswap tokens sent to an address that already delegates UNI will in fact be automatically delegated, confirming CZ’s statements.

Adams also pointed out that crypto exchanges like Binance should consider building governance votes directly into their platforms. This could enable their customers to use their tokens if they want to actively participate in the further development of certain crypto projects.