Binance see withdrawals of $2.6 billion in last 24 hours, data firm Nansen says
LONDON – Binance has seen withdrawals of US$1.9 billion (S$2.6 billion) in the last 24 hours, blockchain data firm Nansen said on Tuesday, as the worlds biggest crypto exchange said it had temporarily paused withdrawals of the USDC stablecoin.
How crypto exchanges such as Binance and its now-bankrupt former rival FTX handle customer deposits is under close scrutiny from users and regulators. FTXs founder Sam Bankman-Fried was charged by the US Securities and Exchange Commission on Tuesday with defrauding investors.
Binance, whose dominance of crypto was cemented by the fall of FTX, last week tweeted a so-called proof-of-reserves report by audit firm Mazars. The report showed its holdings of bitcoin exceeded customer deposits on a single day in November.
The US$1.9 billion ethereum-based withdrawals marks the largest daily outflow over a 24-hour period since June 13, the Nansen data showed, and accounted for the majority of the funds being pulled in the last seven days.
Binances withdrawals are increasing due to the growing uncertainty about its reserves report, a Nansen spokesman said.
A spokesman for Binance said People deposit and withdraw assets everyday for a variety of different reasons. User assets at Binance are all backed 1:1 and Binances capital structure is debt free.
We always have more than enough funds to fulfil withdrawal requests, the spokesman added.
Asked whether Binance had enough USDC to meet USDC withdrawal requests, the spokesman said: From time to time we may need to top up hot wallets from our cold wallets, convert one stablecoin to another or carry out routine network maintenances upgrades, all of which can cause occasional short delays. This is business as usual.
Crypto news outlet CoinDesk reported earlier that Binance saw outflows of US$902 million on Monday.
The exchange is already under pressure from authorities. Splits between US Department of Justice prosecutors are delaying the conclusion of a long-running criminal investigation focused on Binances compliance with US anti-money laundering laws and sanctions, Reuters reported on Monday.
The report sparked a drop of almost 4 per cent in Binances BNB token, traders said.
The Nansen data came as Binance halted withdrawals of USDC, citing a token swap – where digital token holders exchange their crypto coins, typically over different blockchains.
On USDC, we have seen an increase in withdrawals, Binances chief executive Changpeng Zhao tweeted.
Binance said in September it would automatically convert user balances and new deposits of USD Coin and two other stablecoins into its own stablecoin, Binance USD.
Mr Zhao said on Tuesday swapping USDC with two other tokens – Paxos Standard and Binance USD – requires using traditional dollars at a bank in New York. The banks are not open for another few hours. We expect the situation will be restored when the banks open. REUTERS More On This Topic MAS dispels misconceptions on crypto exchange Binance following FTX collapse I thought crypto exchanges were safe: The lesson in FTXs collapse
