- Binance witnessed massive crypto outflow, assuring investors that the exchange can withstand the stress test.
- Changpeng Zhao informed traders that the exchange processed $1.4 billion in withdrawals over a 24-hour period, and Binance holds customer funds as is.
- Binance’s native token BNB is trading at $274 despite crypto jitters and fear of the exchange’s insolvency.
Binance CEO Changpeng Zhao aka CZ, addressed the rumors of the exchange’s insolvency amidst rising withdrawals on the platform. CZ informed his 7.9 million followers on Twitter that despite processing nearly $1.4 billion in crypto withdrawals, the outflow is not even close to the top five withdrawal days on Binance’s exchange.
Following the Terra LUNA implosion and the FTX exchange crash, Binance processed withdrawals for users without interruptions, the exchange holds customer funds as is and remains solvent till date.
Binance processes massive withdrawals, Changpeng Zhao alleviates user concerns
Binance, the largest exchange by trade volume, has been smoothly processing withdrawals for users despite a massive spike in the outflow in the last 24-48 hours. FTX exchange collapse fueled crypto jitters among users and crypto Twitter is rife with speculation of Binance’s insolvency.
Changpeng Zhao, the CEO and majority stakeholder in Binance International and Binance US assured traders that the exchange remains solvent despite $1.4 billion in withdrawals in a 24-hour period.
The current withdrawals do not rank in the top five withdrawal days for the exchange, the days following the $41 billion implosion of Terra’s sister tokens LUNA and UST and FTX exchange’s collapse.
Things seem to have stabilized. Yesterday was not the highest withdrawals we processed, not even top 5. We processed more during LUNA or FTX crashes. Now deposits are coming back in. 🤷♂️💪 https://t.co/WLK2KyCym0— CZ 🔶 Binance (@cz_binance) December 14, 2022
DU09BTC, a crypto analyst, addressed the fear, uncertainty and doubt (FUD) surrounding Binance. The technical analyst argues that Binance has processed $6 billion in cryptocurrency withdrawals using deposits from their wallets. In comparison, FTX exchange went insolvent after the first few billion and the current withdrawal spree is a good stress test where only the best survive the bear market.
#Binance has processed $6 bil in withdrawals in the past 24h.— Duo Nine | discord.gg/ycc (@DU09BTC) December 14, 2022
They also processed $6 bil in deposits from their wallets to pay everyone. #FTX was already insolvent after the first few billions.
This is a good stress test. Only the best survive a bear market. pic.twitter.com/xVyXyjjLnk
Binance assures traders of crypto reserves
A Binance spokesperson told Bloomberg that the exchange is debt free. The statement reads as follows:
People deposit and withdraw assets everyday for a variety of different reasons. User assets at Binance are all backed 1:1 and Binance’s capital structure is debt free. We maintain hot wallet balances to ensure that we always have more than enough funds to fulfill withdrawal requests and we top up hot wallet balances accordingly.
Commenting on the Binance proof-of-reserves report from the accounting firm Mazars, the exchange commented:
We are working collaboratively with Mazars to share all relevant financial information with them so that they can verify the accuracy of all the data we have shared as well as our process for extracting the data.
BNB price remains steady despite crypto jitters
Binance’s native token Binance Coin (BNB) price remained largely unchanged despite mass withdrawals on the exchange platform. BNB is exchanging hands at $274.58 and the price is up 2.2% in the past 24 hours.
BNB/USD price chart
BNB yielded nearly 6% gains for holders overnight despite the spree of withdrawals that Binance is tackling for the last 48 hours.