Binance recorded $3.6 billion withdrawals in the last 7 days
As some marker makers are reported to have left the exchange, the firm recorded net withdrawals of over $3.6 billion.
Binance is experiencing a massive drop in liquidity as investors withdrew more than $3.6 billion in few days, analyst firm Nansen indicates.
According to blockchain analytics firm, between December 7 and December 13 Binance's gross outflows amount to approximately $8.8 billion, while gross totaled $5.1 billion. In particular, Binance has recorded over $1.9 billion of withdrawals in the last 24 hours, the largest daily outflow since June 13. On December 13, Binance announced a temporarily withdrawals halting of the stablecoin USDC due to a “token swap.”
“Concurrently, a large market maker, Jump, was found to have withdrawn huge sums from Binance with no deposits over the past few weeks, ultimately seems to have caused jitters among both retail and institutional users,” Andrew Thurman, content lead for Nansen, told CNN. “In short, it’s a lot of money headed out, and that’s spooked some folks.” A report about an ongoing investigation by the US Justice Department into the exchange was a factor in investors’ nervousness, he said.
Binance Netflow 7D ($) -3,660,311,347— Nansen 🧭 (@nansen_ai) December 13, 2022
8,783,380,428 - Outflow
5,123,069,081 - Inflow
Exchange Flows dashboard ⤵️https://t.co/CYrBQLryQ0 pic.twitter.com/vV6vcqoWKK
After the release of its Proof of Reserves audited results last week as well as a report of a potential criminal investigation from the U.S. government, the crypto markets have become more concerned about Binance's stability in the wake of the collapse of competitor exchange FTX. While the report, verified by Mazars, claimed that Binance’s BTC reserves are over-collateralized, analysts and experts have criticized the audit for its lack of information.
“We saw some withdrawals today. We have seen this before. Some days we have net withdrawals; some days we have net deposits. Business as usual for us,” Binance’s CEO Changpeng Zhao commented.
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.— CZ 🔶 Binance (@cz_binance) December 13, 2022
I actually think it is a good idea to “stress test withdrawals” on each CEX on a rotating basis. 💪