Binance Hit by Crypto Outflows as FTX Drop Shakes Exchanges

[ad_1]

Flows are still relatively low given Binances’ reserves, said Alex Svanevik, Managing Director of Nansen, referring to Binances’ recent exits. But given everything that’s happened, it’s no surprise that many are choosing a cautious approach.

The U.S. Securities and Exchange Commission said Tuesday it has accused Bankman-Fried of orchestrating a scheme to defraud investors in FTX stock.

He was also charged with eight counts, including conspiracy and wire fraud, in an indictment unsealed by a Manhattan federal court judge.

Market maker Jump Trading is among those drawing funds from the Binances platform, according to Nansen. Jump has withdrawn $18.4 million net in the past 24 hours and $123.4 million in the past seven days on the Ethereum blockchain, according to the data.

While a market maker like Jump routinely moves large sums to and from exchanges, it’s unusual to see such regular outflows without any inflows, Svanevik said.

Binance temporarily halted USDC stablecoin withdrawals on Tuesday because it could not process such transactions until its banks opened in the United States, Zhao said in a tweet. We hope the situation will be restored when the banks open, he tweeted.

Since Binance automatically converts USDC deposits into its own stablecoin BUSD, it must transfer clients’ holdings back to USDC when they wish to withdraw it from its exchange.

Changpeng Zhao, billionaire and CEO of Binance.Bloomberg

Binance and Zhao have worked to counter any attempt to wrap the company in the so-called FUD crypto language for fear, uncertainty and doubt. Part of this is an effort to reassure him of his reservations. Binance in a November blog post shared details of digital asset wallet addresses with tokens worth around $69 billion.

Last week, the exchange released a proof of reserves report. The document, based on a snapshot review by accounting firm Mazars, shows that the exchange has enough crypto assets to balance out its platform’s total liabilities.

But the report also acknowledges the limitations, as it was not a true financial statement audit that would have given a clearer picture of Binances’ overall health.

$2 trillion rout

The crypto industry remains mired in a deep downturn after a $2 trillion digital asset rout over the past year. The slide was pockmarked by a series of explosions of which FTX, once valued at $32 billion, was perhaps the most damaging.

The FTX wipeout is an event that Zhao himself may have helped accelerate with a Nov. 6 tweet about plans to sell a $530 million portfolio of native FTX digital tokens.

Zhao, also known as CZ, tried to restore trust in the industry. Last month, he pledged to create a stimulus fund of up to $2 billion to help promising crypto startups facing cash shortages. He also said that Binance US plans to relaunch its bid for the assets of bankrupt lender Voyager Digital.

Binance cemented its position as the largest crypto exchange in the wreckage of FTX bankruptcy on Nov. 11. Its average daily trading volume in the first week of December was more than eight times that of second-placed Coinbase Global. The comparable figure for the last week of October was around seven times. It’s based on calculations on data from digital asset information provider Kaiko.

However, exchange-listed Coinbase was less impacted by customers withdrawing crypto, seeing a net outflow of $546 million last week and a small inflow over the past 24 hours, according to data from Nansen.

Bloomberg

[ad_2]