The following is a response to CZ Binance's twitter thread: https://twitter.com/cz_binance/status/1236373815447506945
Q1: Justin Sun claims that some witness froze his 65m coins, not just blocked from governance, but not even allowed to transfers. This has happened on Feb 22. Is it true?
Yes. This was TEMPORARILY done by community consensus since the witnesses implementing that soft fork (0.22.2) were voted active by the community.
This was deemed necessary by witnesses after repeated failed attempts by them to reach Tron/Justin Sun for clarifications regarding moving Steem to a Tron token and also diluting the supply as well as discussing the somewhat "tainted" history of the SteemIt Inc. tokens.
The reasons for this are twofold:
a) Ensure none of that stake is suddenly dumped on the market seeing as there is a dispute about what it's there for.
b) Ensure that no irreversible governance decisions take place since that stake represents a relative majority (due to not all stake currently voting such as the one in exchanges) but not ABSOLUTE majority.
Q2: Justin thinks the company has the right to use those coins, but some in the community seems to think there was a promise that those coins would never be used. What’s the history/story here? I have not seen any evidence of promise not to use those coins.
There is no signed contract if that's what you're looking for (hard to sign a contract between an entity and a community). But there is a wealth of mentions over the years about its use for platform development, decentralization and non-interference in governance. A large amount of people invested in STEEM by trusting those promises/roadmaps/announcements etc.
Q3: There seem to be an attempt to completely destroy those 65m coins. Just a pull request, not voted yet.
That's a year-old pull request that was completely shot down by everyone. As it is a public repo, anyone can do a PR. I can do a PR in 5 minutes that sets the Steemit stake keys to the same keys as the binance-hot account. Would you take that to mean the witnesses are attempting to hand YOU the stake?
Q4: What does concern me is, there seem to be an attempt to freeze Binance (and other exchange) user funds as well, or at a minimum block them from voting.
Again. This is a piece of code that none of the witnesses have agreed to run. Specifically it is the same as the 0.22.2 Soft Fork (i.e. temporarily block access to the SteemIt Inc. Stake pending dispute resolution) combined with a block on exchanges voting. As you yourself have stated, Binance does not want to interfere in governance. As you may have also noted, it is practically impossible since it kills liquidity for exchanges due to the 13 week power-down rule which is why everyone was surprised by Binance's actions.
As far as your users being allowed to vote, that would be an excellent feature by Binance (although technically very challenging and might not even be possible as things currently stand) and I agree that users may want to trade without losing their ability to vote.
However that is EXACTLY what you have done now. There are users that may want to vote for the old or new witnesses that can't because by powering up your stake and removing your liquidity, they can no longer withdraw and vote.
Further more, Justin Sun is trying to spin a false narrative by claiming the operations blocked for SteemIt accounts are the same that would potentially be blocked for exchanges on the 0.22.6 soft fork. That is absolutely not true. That is exactly why there are 2 sets of accounts as 2 different sets of operations are blocked for each. 0.22.6 would not interfere with exchanges operations in the slightest. Any dev will be able to explain the code to you.
Disclaimer: I am not a Steem witness, I am hardly invested in Steem and I'm not involved in its governance. I am however very familiar with governance on DPoS/Graphene based chains.