LONDON: Blockchain data firm Nansen reported on Tuesday that the world’s largest cryptocurrency exchange, Binance, saw withdrawals of approximately $2 billion in the last 24 hours. This comes after the site announced that it had “temporarily suspended” withdrawals of the USDC stablecoin.
Binance, whose dominance in the cryptocurrency market was solidified by the bankruptcy of rival exchange FTX, tweeted a so-called proof-of-reserves report from the accounting firm Mazars last week. According to the study, on a single day in November, their holdings of bitcoin were greater than the deposits made by customers.
The amount of $1.9 billion was the greatest daily outflow since at least June, as shown by the Nansen data, and it accounted for the majority of the $2.2 billion in etheruem-based withdrawals that occurred over the course of the previous week.
According to a statement released by Nansen, a spokeswoman noted that “Binance’s withdrawals are increasing due to the growing doubt surrounding its reserves report.”
According to a statement made by a Binance official, “People deposit and withdraw assets on a daily basis for a number of different reasons.” All of the user assets on Binance are backed 1:1, and the company’s capital structure does not include any debt.
The representative went on to say that there are always more than enough money available to fulfil withdrawal requests.
CoinDesk, a cryptocurrency news outlet, reported earlier that Binance experienced withdrawals totaling $902 million on Monday.
The authorities have already begun to exert pressure on the exchange. The end of a lengthy criminal investigation that is focused on Binance’s compliance with US anti-money laundering rules and sanctions is being delayed as a result of internal disagreements among prosecutors working for the US Department of Justice.
The news caused a decline in the value of the BNB cryptocurrency that Binance trades with of over four percent.
The Nansen data was released at the same time that Binance temporarily blocked withdrawals of USDC. The exchange cited a “token swap,” which is a process in which holders of digital tokens exchange their crypto currency, generally across various blockchains.
In September, Binance announced that it would automatically convert user balances and new deposits of USD Coin and two other stable coins into Binance USD, which is Binance’s own stablecoin.
On Tuesday, Zhao stated that exchanging USD Coin for two additional tokens, namely Paxos Standard and Binance USD, required the use of fiat currency through a financial institution located in New York. It will be a while before the banks are open for business. When the banks reopen, we anticipate that the situation will be back to normal.”
Source: Dawn.com
