LONDON/SINGAPORE, Dec 14 (Reuters) – The head of major crypto exchange Binance said on Wednesday deposits were returning, a day after it saw large outflows of cryptocurrencies and halted some withdrawals of stablecoins.
On Tuesday, blockchain data firm Nansen said Binance saw $1.9 billion in withdrawals in 24 hours, the largest such outflow since June. Users withdrew $3.7 billion in crypto in the seven days to Tuesday, it added later.
Binance, the world’s largest crypto exchange, has also temporarily suspended withdrawals of the main stablecoin USDC, citing a so-called “token swap”.
“Things seem to have stabilized,” CEO Changpeng Zhao tweeted. “Yesterday wasn’t the highest draw we’ve processed, it wasn’t even top 5.”
[1/3] A smartphone showing the Binance logo and a representation of cryptocurrencies is placed on a keyboard in this illustration taken November 8, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
In the past 24 hours, Binance saw a net inflow of tokens on the ethereum blockchain totaling about $718 million, Nansen told Reuters. Binance did not immediately respond to a request for comment.
How crypto exchanges such as Binance and its now-bankrupt former rival FTX handle customer deposits has come under close scrutiny from users, regulators and politicians.
Binance said on Tuesday that it always has “more than enough funds” to meet withdrawal requests. “User assets on Binance are 1:1 collateralized and Binance’s capital structure is debt-free,” a spokesperson said.
The exchange also faces legal pressure. Disagreements between US Justice Department prosecutors are delaying the conclusion of a years-long criminal investigation focused on Binance’s compliance with US anti-money laundering laws and sanctions, Reuters reported on Monday, triggering a 4% drop in Binance’s own BNB token.
Nansen CEO Alex Swanevik told CNBC that the reporting has led to “concern in the market” with investors remaining cautious and pulling crypto from exchanges.
“FUD has brought a ‘stress test’ which in turn helps build confidence in exchanges that pass the test,” Zhao tweeted on Wednesday, using an acronym for “fear, uncertainty and doubt” often used in crypto in reference to news perceived as negative.
Reporting by Tom Wilson and Ray Wee; editing by Gerry Doyle, Jason Neely and Louise Havens
Our standards: The Thomson Reuters Trust Principles.
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