Binance, the biggest cryptocurrency exchange in the world, saw as much as a $3 billion withdrawal on Tuesday, per the blockchain analytics company Nansen, as consumers panicked about a wave of bad news stories about the cryptocurrency business.
When Binance was at its busiest, as much as $3 billion in net outflows were happening every day, according to Andrew Thurman, the content head for Nansen. He blamed the concern of investors on news that the US Justice Department was looking into the exchange, CNN reported.
Thurman noted that while this was Binance withdrawals happening, concurrently, a large market maker, Jump, was revealed to have withdrawn substantial amounts from Binance with "no deposits" over the previous several weeks. In essence, a large amount of cash is fleeing, which has caused concern and nervousness to some people.
Jump Crypto is a component of the Jump Trading Group, which is a measurable trading enterprise.
The CEO of Binance, Changpeng Zhao, has said that the exchange has had "some withdrawals" of around $1.1 billion. Later, he clarified that the business has survived harsher days.
CZ Downplays Withdrawal Surge
"CZ" Zhao has said that the fall of FTX in November has caused widespread pessimism in the cryptocurrency industry. Sam Bankman-Fried, the creator of Binance's former rival, was apprehended in the Bahamas this week when US authorities pressed criminal charges against him.
Zhao remarked on the Binance withdrawals: "The fact is just because one bank is bad doesn't mean all the other banks are bad."
Later on, Cryptopotato published an update on the Binance withdrawals stating that CZ came to Twitter to reassure users that the bulk withdrawals of cash from Binance had ceased. He said that the platform had processed more transactions before Terra crashed and FTX was shut down, thus the "outgoing transactions" weren't even in the top 5.
He announced on Twitter that "Things seem to have stabilized" and "Now deposits are coming back in."
Just Business as Usual
The Binance CEO said it's "business as usual" and they had demonstrated their reliability to customers. Although events like Binance's "stress test" are good for the company and help it gain reputation, he thinks it was caused by an escalation of false information and fear (FUD) among crypto players.
We saw some withdrawals today (net $1.14b ish). We have seen this before. Some days we have net withdrawals; some days we have net deposits. Business as usual for us.
— CZ 🔶 BNB (@cz_binance) December 13, 2022
I actually think it is a good idea to “stress test withdrawals” on each CEX on a rotating basis. 💪
1/2 https://t.co/uF9lLPDSyS
The value of the digital currency has been falling as investors have become anxious about the industry as a whole. Bitcoin's price has fallen by more than 60 percent this year, and it was recently trading below $18,000.
After FTX's stunning fall, however, Binance's company is also being closely examined. Unnamed sources told Reuters on Monday that US authorities were contemplating closing their money laundering probe against Binance by "filing criminal charges" against specific executives including founder Changpeng Zhao."
Binance temporarily blocked USDC withdrawals earlier on Tuesday, claiming a "token swap," in which cryptocurrency holders trade tokens for other tokens, generally across multiple blockchains, per Al Jazeera. At around 8:20 a.m. GMT, Binance's Zhao tweeted, "On USDC, we have witnessed an upsurge in withdrawals."
In September, Binance announced that new deposits and user balances of USD Coin and two other stablecoins will be automatically converted into Binance USD, the company's own stablecoin.
