December 14, 2022

Binance Saw Withdrawals Over $3 Billion in 7 Days

Binance

Binance

Binance had witnessed withdrawals of more than $3.6 billion from December 7 to December 13, a matter which negatively affected its liquidity, according to a recent report by Nansen, a crypto analytics company.

In a tweet, Nansen clarified that Binance saw total outflows worth about $8.8 billion, while the gross inflows reached over $5.1 billion.

The report mentioned that in November, Binance saw inflows of Ethereum ERC-20 tokens worth $2 billion, but it witnessed outflows worth $1 billion from December 12 to 13.

Andrew Thurman, a technician in Nansen, attributed this decline in liquidity to large crypto makers’ partial exit from the world’s largest crypto exchange, referring to the withdrawal made by Wintermute, a crypto maker, of more than $300 million on December 11 and 12 in addition to the Jump Finance’s redemption of Binance USD worth over $30 million from December 12 to 13.

In this regard, Binance CEO Changpeng Zhao commented on the recent withdrawals, saying they come as a stress test that proves that the crypto exchange is solvent, considering these moves keep the industry healthy.

“We saw some withdrawals today (net $1.14b ish). We have seen this before. Some days we have net withdrawals; some days we have net deposits. Business as usual for us. I actually think it is a good idea to “stress test withdrawals” on each CEX on a rotating basis,” Zhao tweeted.

Coin Telegraph reported that Binance may be negatively affected when Reuters published a report on December 12, alleging that the US Department of Justice was considering charging Binance executives with financial crimes, a matter which Binance completely dismissed.

Earlier, Zhao urged governments around the world to adopt and regulate the crypto industry instead of fighting it. He also announced that his firm would allocate $1 billion to set up a recovery fund with an intent to increase that amount to $2 billion soon if the need arises.

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