Binance Founder Changpeng Zhao (CZ) informed personnel that he is anticipating a difficult period ahead due to an ongoing withdrawal of funds from the major crypto exchange. The crypto industry is struggling in the wake of high-profile bankruptcies and tighter regulations, thus making this warning necessary.
$3 Billion Withdrawn from Binance at its Peak, Data from Nansen Shows
The biggest cryptocurrency exchange in terms of trading volume had net outflows exceeding $3 billion on Tuesday, November 13, according to blockchain analytics firm Nansen. This news comes as Changpeng Zhao, the founder and CEO of Binance, attempts to reassure his staff that the company is financially secure enough to weather the crypto winter.
Binance Netflow 7D ($) -3,660,311,347
8,783,380,428 – Exit
5,123,069,081 – Entry
Trade Flow Dashboard ⤵️https://t.co/CYrBQLryQ0 pic.twitter.com/vV6vcqoWKK
— Nansen 🧭 (@nansen_ai) December 13, 2022
The coin trading platform is struggling to cope with a series of negative events, including the collapse and bankruptcy filings of FTX, a major competitor in forex markets, in November. FTX founder Sam Bankman-Fried is currently facing charges in the Bahamas in connection with the US Justice Department investigation.
Binance It currently has $60.4B in publicly disclosed addresses
— Nansen 🧭 (@nansen_ai) December 14, 2022
CZ Acknowledges Withdrawals and Looks to Reduce Outflows
In a tweet posted on Tuesday, Changpeng Zhao acknowledged the lack of funds and verified that Binance had dealt with similar situations before. “Some days we have net withdrawals; some days we have net deposits. As usual for us,” he said, suggesting “it’s a good idea to stress test withdrawals at each CEX on a rotating basis.”
In a memo to his staff, the crypto executive sought to quell any doubts about the exchange’s financial health. According to a Bloomberg report which cited the document, Zhao said that the industry is currently experiencing a “historic moment” where Binance is in a strong financial position and will be able to “survive any crypto winter.”
“While we anticipate the coming months to be eventful, we will make it through this challenging period and be stronger for having gone through it,” CZ told the Binance team. Referring to the most recent developments in this space, he said that FTX’s collapse had led to