Binance CEO says outflows have stabilized after investors withdrew $1.9 billion in 24 hours; warns of ‘bumpy’ recovery
Just a day after Binance ‘temporarily paused’ withdrawals following the outflow of $1.9 billion from the world’s largest crypto exchange, Binance CEO Changpeng Zhao (CZ) said a degree of calm has returned to the exchange. “Things seem to have stabilized,” CZ tweeted, adding that “deposits are now coming back in” to the exchange and “business as usual.”
Unlike the withdrawals that led to the collapse of FTX and Terra/Luna, Binance was able to withstand investors’ stampede. A spokesperson for Binance said on Tuesday the exchange always had “more than enough funds” to meet withdrawal requests,” adding that “user assets at Binance are all backed 1:1 and Binance’s capital structure is debt free.”
According to data from blockchain firm Nansen, investors withdrew $1.9 billion in just 24 hours. It was the largest outflow since June. Nansen added that Binance customers had withdrawn $3.7 billion in crypto over the seven days to Tuesday.
However, CZ said the outflow was not the highest withdrawal Binance had processed. “Yesterday was not the highest withdrawals we processed, not even top 5,” Zhao said. He added that the exchange had had bigger outflows in the wake of the Terra/Luna and FTX collapses.
“Things seem to have stabilized. Yesterday was not the highest withdrawals we processed, not even top 5. We processed more during LUNA or FTX crashes. Now deposits are coming back in.”
Things seem to have stabilized. Yesterday was not the highest withdrawals we processed, not even top 5. We processed more during LUNA or FTX crashes. Now deposits are coming back in. 🤷♂️💪 https://t.co/WLK2KyCym0
— CZ 🔶 Binance (@cz_binance) December 14, 2022
On Tuesday, Binance was forced to temporarily suspend withdrawals of USDC, a stablecoin that acts largely as a gateway between the crypto and the US dollar. The exchange was unable to keep pace with a flood of withdrawal requests from customers spooked by an increasingly loud drumbeat of negative news around digital currencies. The exchange later lifted the suspension just in time at the start of the U.S. business day.
Founded in 2017 by Changpeng Zhao and Yi He, the Cayman Islands-based Binance is the world’s largest crypto exchange. It provides a platform for trading various cryptocurrencies. Binance also provides access to exchange digital currency pairs on the market while maintaining security, and liquidity, enabling a safe and efficient deal with anyone, anytime and anywhere.
Before founding Binance, CEO Changpeng Zhao previously founded Fusion Systems in 2005 in Shanghai; the company that built high-frequency trading systems for brokers. In 2013 he joined Blockchain.info as the third member of the cryptocurrency wallet’s team. He also worked at OKCoin as CTO for less than a year, a platform for spot trading between fiat and digital assets.