The data provider Nansen announced on Tuesday that $1.9 billion had been drained in the past 24 hours.
(Photo: Reuters)
Dusseldorf According to an analysis company, customers of the world’s largest crypto exchange Binance are withdrawing money from the company on a large scale. On a weekly basis, the sum is 3.7 billion dollars, as the data provider Nansen announced on Tuesday.
The outflow of funds was particularly strong in the past 24 hours (as of Tuesday, 8:20 a.m. CET). Customers are said to have withdrawn $ 1.9 billion here. That was 18 times more than the next largest outflow at competitor Bitfinex.
According to Nansen, customers are emptying their accounts because they are skeptical about the company’s latest report on its cash cushion. In the listing, Binance’s bitcoin holdings exceeded customer deposits in just a single day. The company has emphasized in the past that all deposits are covered one to one.
However, Alex Svanevik, Chief Executive Officer at Nansen, also pointed out: “Outflows are still relatively small considering Binance’s reserves. But given all that has happened, it’s not surprising that many are taking a cautious approach.” Binance has yet to comment on the outflow of client funds.
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The news caused the crypto industry to sit up and take notice after now-bankrupt Binance competitor FTX was accused of mishandling customer funds. Since then, there has been concern on the market that after the bankruptcy of the formerly third-largest crypto exchange, other companies could get into trouble.
Crisis of confidence in the crypto market
Binance had therefore recently tried to counter speculation about a possible risk of infection. For example, in a blog post in November, Binance published details on wallet addresses for digital assets with tokens worth around $69 billion.
The exchange’s cryptocurrency, Binance Coin (BNB), tumbled around nine percent to as low as $257.91 on Tuesday in response to the outflows. However, the price then stabilized again and is currently even slightly up over the 24-hour period.
The crypto world is currently in a crisis of confidence. Year-to-date, the value of all cryptocurrencies fell from $2.2 trillion to $850 billion. The trigger was the interest rate hike by the US Federal Reserve, which is making risky assets such as cryptocurrencies less attractive. As a result, various crypto projects that were based on speculating on further rising prices with customer funds collapsed.
Report on investigation against Binance
The move was bolstered by a report by Reuters news agency that disagreements among U.S. Department of Justice prosecutors are delaying the completion of a lengthy criminal investigation into Binance. The investigation began in 2018 and focuses on Binance’s compliance with US anti-money laundering and sanctions laws.
According to Reuters, some of the federal prosecutors involved believe the evidence collected warrants an aggressive crackdown on the stock market and criminal charges against individual executives. Others would have advocated taking the time to consider more evidence.
More: FTX founder Bankman-Fried arrested in the Bahamas