Home FinTech Binance withdrawals reached $1.9 billion in a day

Binance withdrawals reached $1.9 billion in a day

In the past day, Binance has seen transactions of $1.9 billion, according to blockchain data company Nansen. On Tuesday, the largest cryptocurrency exchange in the world said that it had “temporarily suspended” withdrawals of the well-sought USDC stablecoin.
Users and regulators are closely monitoring how cryptocurrency exchanges like Binance and its newly-bankrupt erstwhile rival FTX handle consumer money.
Sam Bankman-Fried, the founder of FTX, was accused of defrauding investors on Tuesday by the U.S. Securities and Exchange Commission.
The demise of FTX solidified Binance’s supremacy in the cryptocurrency market, and last week it tweeted a purported proof-of-reserves report from audit company Mazars. The study revealed that on one day in November, its bitcoin holdings were greater than what customers had deposited.
Nansen data showed the $1.9 billion in withdrawals of Ethereum-based tokens represents the highest 24-hour outflow of cash since June 13 and is responsible for the bulk of the money taken out in the previous seven days.

A Nansen spokesman claimed Binance’s withdrawals are rising as a result of the rising ambiguity around its reserves report.
Business as usual, according to the CEO of Binance, Changpeng Zhao, regarding the withdrawals. There have been several withdrawals today totalling roughly $1.14 billion net. This is nothing new, and some days there are net deposits while other days there are net withdrawals.
Earlier, a spokesman for Binance claimed that the company always had more than sufficient money to cover withdrawal requests. According to the source, all user assets at Binance are backed 1:1 and the company has a debt-free capital structure.
When asked if Binance had enough USDC to fulfil USDC withdrawal requests, the representative stated that there would be delays if monies needed to be transferred from offline wallets to online “hot” digital wallets, stablecoins needed to be converted, or network enhancements needed to be made.
A previous report from the cryptocurrency news site CoinDesk claimed Binance lost $902 million on Monday.
Authorities have already put pressure on Binance.
A protracted criminal investigation into Binance’s compliance with American anti-money laundering rules and sanctions is being delayed due to disagreements among US Department of Justice prosecutors.
According to traders who spoke about the matter, the revelation caused Binance’s BNB coin to fall by over 4%.
The release of the Nansen data coincided with Binance stopping USDC withdrawals due to a “token swap,” in which holders of digital tokens trade their cryptocurrency for one another, generally across multiple blockchains.
Changpeng Zhao, CEO of Binance, tweeted about an uptick in withdrawals on USDC at roughly 0820 GMT.
In September, Binance announced that new deposits and user balances of USD Coin and two more stablecoins would be automatically converted into Binance USD, the company’s stablecoin.
Zhao stated on Tuesday that exchanging USDC for Paxos Standard and Binance USD necessitates using conventional dollars at a bank in New York.
For a couple more hours, the banks are closed. When the banks open, it is anticipated that the problem would be rectified.
The second-largest stablecoin in the world is USDC, produced by the American company Circle. When assets are traded in the manner Binance has done with USDC, Dante Disparte, Circle’s top strategy officer and director of global policy, predicted that there will be “obstacles” pertaining to liquidity and redemptions.

Disparte continued, “Liquid dollar virtual currencies should have the property of being redeemable on demand and at par at all times, even under pressure.”
The consumer price index increased by 0.1% from the previous month in November, down from a 0.4% rate in October, according to the report released on Tuesday, which was on the Fed’s agenda.
The slowdown raises the possibility that the Fed’s most zealous round of interest rate increases in 40 years may finally be beginning to cool demand and lessen price pressures generally.

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