Customers withdraw $1.9 billion from crypto exchange Binance in 24 hours

Binance has seen $1.9 billion in withdrawals in 24 hours, blockchain data firm Nansen said Tuesday, as the world’s largest crypto exchange said it had the stablecoin’s withdrawals USDC “temporarily suspended”.

The exact scrutiny of how crypto exchanges like Binance and its now-bankrupt former rival FTX handle customer deposits is under scrutiny from users and regulators. FTX founder Sam Bankman-Fried was charged Tuesday by the U.S. Securities and Exchange Commission (SEC) with defrauding investors.

Binance, whose dominance in crypto was cemented by the fall of FTX, tweeted a so-called proof-of-reserve report from auditing firm Mazars last week. The report showed that its bitcoin holdings exceeded customer deposits in a single day in November.

The $1.9 billion in Ethereum-based withdrawals represents the largest daily outflow over any 24-hour period since June 13, Nansen data showed, and accounted for the bulk of the funds withdrawn in the last seven days were deducted.

“Binance’s withdrawals are increasing due to growing uncertainty about its reserves report,” said a Nansen spokesman.

A Binance spokesman said: “People deposit and withdraw assets every day for a variety of reasons. Binance user assets are all 1:1 secured and Binance’s capital structure is debt free.

“We always have more than enough funds to fulfill withdrawal requests,” the spokesperson added.

When asked if Binance has enough USDC to fulfill USDC withdrawal requests, the spokesperson said, “From time to time we may need to fund hot wallets from our cold wallets, convert one stablecoin to another, or perform routine network maintenance upgrades carry out all this, there may occasionally be short delays. This is business as usual.”

Crypto news outlet CoinDesk previously reported that Binance recorded outflows of $902 million on Monday.

The stock market is already under pressure from the authorities. Divisions among U.S. Department of Justice prosecutors are delaying the conclusion of a long-running criminal investigation focused on Binance’s compliance with U.S. money laundering laws and sanctions, Reuters reported Monday.

The report triggered a nearly 4 percent drop in Binance’s BNB token, traders told Reuters.

The Nansen data came as Binance halted USDC withdrawals, citing a “token swap” – where digital token holders exchange their crypto coins, typically across different blockchains.

“At USDC, we have seen an increase in withdrawals,” Binance CEO Changpeng Zhao tweeted.

Binance said in September that it would automatically convert user funds and new deposits from USD Coin and two other stablecoins to its own stablecoin, Binance USD.

Mr. Zhao said on Tuesday that exchanging USDC with two other tokens — Paxos Standard and Binance USD — requires using traditional dollars at a bank in New York. “We expect the situation to be restored when the banks open,” he said.

https://www.independent.ie/business/world/customers-withdraw-19bn-in-24-hours-from-crypto-exchange-binance-42217681.html Customers withdraw $1.9 billion from crypto exchange Binance in 24 hours

Fry Electronics Team

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