The rising concern of more enforcement actions targeting crypto exchanges is taking a toll on the world’s largest centralized operation Binance, according to a report by Reuters. Citing data provided by Nansen, it is being claimed that Binance has experienced $1.9 billion in withdrawals in the last day. At the same time, withdrawals of USDC, the dollar-based stablecoin, have been halted.
The data indicates that “Binance’s withdrawals are increasing” due to worries about the platform’s reserves. Reuters quoted a Binance representative who said all funds are safe and user assets are all backed 1:1.
“We always have more than enough funds to fulfill withdrawal requests.”
Changpeng “CZ” Zhou, Binance founder and CEO, took to Twitter to defend his company, stating they have “seen an increase in withdrawals. However, the channel to swap from PAX/BUSD to USDC requires going through a bank in NY in USD. The banks are not open for another few hours. We expect the situation will be restored when the banks open.”
On USDC, we have seen an increase in withdrawals. However, the channel to swap from PAX/BUSD to USDC requires going through a bank in NY in USD. The banks are not open for another few hours. We expect the situation will be restored when the banks open. 1/2
— CZ 🔶 Binance (@cz_binance) December 13, 2022
CZ added, “ignore the FUD. Keep building.”
The indictment of FTX and ongoing calls for all crypto exchanges operating in the US to register with the SEC have rattled the entire crypto industry. It was reported earlier this week that the US Department of Justice is mulling charges against Binance for anti-money laundering violations. The allegations of extreme acts of fraud by FTX will have ramifications beyond the bankrupt platform, and more regulation for crypto firms is inevitable.
