Deposits are ‘bouncing back’ but a ‘moderate’ path lies ahead

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Binance CEO Says Deposits 'Rebound' After Suspending USDC Withdrawals

Binance CEO Changpeng Zhao said Wednesday that the situation at his cryptocurrency exchange has “stabilized,” in an effort to allay investor fears after the company was forced to halt withdrawals of a stablecoin.

Zhao said there was a net withdrawal of about $1.14 billion on Tuesday, but tweeted yesterday that it was “not the highest withdrawal we’ve processed, not much. [five].” The CEO said the deposits are returning to finance.


His comments come after Binance USDC Stablecoin Withdrawals Temporarily Stopped On Tuesday, it conducted a “token swap”. Zhao said that Binance has seen an increase in USDC withdrawals. According to Zhao, the withdrawal was suspended because some currency transfers had to be sent through an unspecified bank in New York. After about eight hours of downtime, the financiers began to withdraw.

The episode put investors on edge, especially in the aftermath The collapse of crypto exchange FTX And Subsequent arrest Its founder Sam Bankman-Fried faces federal criminal charges.

Blockchain analytics firm Nansen said on Tuesday that it has taken more than $3 billion in net withdrawals from Binance over the past seven days. But Nansen CEO Alex Swanevik said the situation was different for FTX, which saw “multi-billion dollar” withdrawals.

“I would say you’re definitely seeing a modest pullback from Binance. So it’s definitely worth noting, but as far as I can tell at this point, it’s very different from the FTX situation.” Svanevik told CNBC’s “Capital Connection” on Wednesday.

Svanevik noted that Binance has roughly $60 billion worth of assets on its exchange.

Binance’s Zhao tried to convey a sense of strength within Binance as well.

“While we expect the next few months to be bumpy, we will get through this challenging period — and we will be stronger for having gotten through it,” Zhao wrote in an internal memo. Bloomberg.

Investors have called for more transparency from Binance’s business. Last month, the company released proof of reserves, claiming it had a 101% reserve ratio. This means that there are sufficient assets to cover the customer’s deposit.

But critics have said that the proof of reserve does not go far enough to guarantee the finance’s collateral. Mazars, the auditing firm Binance used for its proof of balance, said in its five-page November report that the company “does not express an opinion or definitive conclusion.”

A Binance spokesperson was not immediately available for comment when contacted about the memo’s contents and criticism of the company’s proof of balance.


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