He Had Exceeded 2 Billion Dollars and Scared the Investors! Binance CEO Zhao Has Made the Point!
CEO Changpeng Zhao made the point for Binance, which came to the agenda with a net outflow of over $ 2 billion on December 12-13 after investors panicked with FUD news that there was a shortage in its reserves. Zhao reported that withdrawals on Binance have returned to normal.
“Back to Normal”
In a tweet on December 13, Binance CEO Changpeng Zhao said, “We saw some money outflows today (net $1.14 billion). We’ve seen it before. Some days there is a net outflow of money, some days there is a net inflow of money. For us, the situation is as usual. In fact, I think it’s a good idea to do a ‘withdrawal stress test’ alternately at each central cryptocurrency exchange.” he made a statement about money outflows with his statements and claimed that the situation was extremely normal.
According to data provided by the crypto analysis platform Nansen, on December 12-13, the crypto currency exchange recorded the highest daily withdrawal since June. Binance has seen a net outflow of over $2 billion, leaving other trading platforms Decisively behind.
In a tweet today, Zhao said, “Withdrawals on Binance have returned to normal. The size of yesterday’s withdrawals was not high, it can not even get into the top 5. There had been more money outflows during the collapse of LUNA or FTX. People started moving their money to Binance again.” he said, adding that the situation has returned to normal.
Concerns About Binance
The high value seen in the withdrawals came just a few weeks after the collapse of FTX, at a time when investors were still concerned about the state of their assets on cryptocurrency exchanges. After the collapse of FTX, it was seen that crypto currency exchanges began to publish proof of reserves in order to regain the trust of investors. Binance took the first step in reser e proofing.
Binance shared its reserves transparently, claiming that they were over-collateralized Bitcoin (BTC) assets, then the global auditing company Mazars published the first report of the Binance Proof-of-Reserve audit, pointing to 101 percent collateralization. However, the report was taken into consideration when analysts pointed out that the report on the reserves of the crypto currency exchange is in a narrow scope. Discussions about the uncertainty in its reserves gained momentum on December 13, after Binance CEO Zhao announced that the exchange had temporarily stopped withdrawals in the stablecoin USD Coin (USDC), citing a token swap issue.
Zhao said, “We have seen an increase in withdrawals in USDC. However, the transition channel from PAX/BUSD to USDC requires passing through a bank in NY in US dollars. The banks are not open for a few more hours. We expect the situation to return to its former state when the banks are opened,” he had explained. A few hours after this announcement, shooting operations had resumed.
Cryptocurrency investors are on edge following the collapse of FTX and the arrest of its founder, Sam Bankman-Fried. Fears remain that the fallout from the FTX could spread to the rest of the market and partially contribute to withdrawals.
On the other hand, Binance, in addition to concerns about its reserves, is also on the agenda with news that a possible criminal prosecution will be opened against the crypto currency exchange by its US regulators. It is alleged that the US Department of Justice is preparing to charge and indict Binance for unlicensed money transfer, money laundering and criminal sanctions violations. If the charges are formalized, it is expected that legal action will be initiated against top Binance executives, including Zhao, in the United States.
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