The massive withdrawals in recent days on Binance have caused panic among investors. The total value of withdrawals from the crypto giant has indeed exceeded $3 billion in one week according to data from wallet tracker Nansen.
Binance: Withdrawal of Ethereum and ERC-20 tokens
Would Binance go through some turbulent areas? In any case, the data provided by Nansen seem to point in this direction. Last Wednesday, the wallet tracker reveals that Binance recorded a net withdrawal of $1.9 billion in just 24 hours the previous day. This is the largest release of its kind since June. In the previous seven days, companies and users had withdrawn $3.7 billion.
Nansen clarifies that this data relates only to the liquidations of Ethereum and ERC-20 tokens from Binance. Knowing that these assets represent 63% of the company’s portfolio, the size of the movements could cause concern among users. Also according to Nansen, Jump Crypto is among the companies that withdrew funds during this period. The exchange reportedly pulled out $123.4 million from Binance.
A stress test?
For Binance, this withdrawal volume is not alarming. “It’s business as usual”explains CZ, the CEO of the exchange on Twitter. This is not an exceptional situation. Anyway, the exchange has enough funds, if not more, to meet this type of demand according to the team of the juggernaut Binance. A spokesperson explains: “Binance user assets are all collateralized 1:1 and Binance’s capital structure is debt-free”.
To appease the spirits, CZ maintains that the deposits recovered quickly, only one day after the strong movements of withdrawal on Tuesday. Even the temporary suspension of USDC stablecoins that same day has nothing to do with this event. It was a simple concern at the level of the conversion of funds, maintains Changpeng Zhao. “Some days we have net withdrawals; some days we have net deposits”he reassures.
Although the situation has stabilized for Binance since Wednesday, CZ fears that the next few days will be somewhat chaotic for the crypto market. But like this resistance test, which it passed with flying colors, the exchange ensures that it has nothing to fear.
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