Concerns about the viability of the exchange have been raised by Binance’s record-breaking withdrawals over the past seven days.
Clients withdrawals’ consequences
The exchange has a 3.6 billion USD deficit since 8.6 billion USD left its platform while only 5.1 billion USD came in. Changpeng Zhao, CEO of Binance, played on anxieties by calling it “business as usual” with some bad and good days.
Following FTX’s demise, fear has engulfed the sector, making investors less trusting than ever of centralized exchanges & services providers.
Despite the fact that Binance has millions of users that trust it, a lot could be changing recently. Huge withdrawals from Binance have been reported, the majority of which have occurred during the last seven days and reached 8.6 billion USD.
The company reported the greatest number of everyday withdrawals since the first month of summer on Tuesday, bringing the weekly total to 8.6 billion USD, Nansen blockchain analytics company. The exchange saw an influx of 5.1 billion USD despite rising withdrawals, leaving it with a total loss of $.6 billion USD.
OTHER CEXs, such as Binance and CoinbaseUS, which both experienced net outflows of around 800 million USD and 38.7 million USD, respectively, trailed behind Binance in terms of withdrawal data.
Among the crypto companies that make the most withdrawals on Binance are JumpCrypto and others. The company has removed 141 million USD from Binance’s balance sheet in the last two weeks.
Binance still has assets worth around 58 billion USD despite record withdrawals, indicating a solid financial foundation for the exchange.
USDT Withdrawal Pause Causes Fear Among Traders
Zhao cited “token swap problems” as the reason why Binance briefly stopped allowing withdrawals of USDC on Tuesday. Recall that in September, Binance introduced a token swap strategy that will convert USDC and 2 other stablecoins to BUSD.
The first halt caused a lot of confusion and concern, and the CEO later explained that it was because of a surge in USD coin withdrawals and the fact that banks were closed for two hours since switching tokens at the bank required traditional cash.