As crypto exchange Binance witnessed the largest stablecoin outflows totaling $2.159 billion in 24 hours, CEO Changpeng Zhao (CZ) warned his staff of turbulent times. He expects the next several months to be bumpy.
But CZ reassured his employees and Binance users that they will get past this challenging period. He hopes Binance to emerge stronger. The world’s biggest cryptocurrency exchange recorded crypto withdrawals worth more than $900 million. As such, Binance temporarily paused withdrawals of the USDC stablecoin.
Users took custody of their coins amid widespread criticism of Binance’s audit report published last week. The report highlighted that Binance’s holdings of Bitcoin exceeded customer deposits on a single day in November.
A spokesperson from Nansen said Binance’s withdrawals are increasing because of the growing uncertainty about its reserves report. But CZ argued that the withdrawals were business as usual. He said Binance has seen such withdrawals before with net withdrawals on some days, and net deposits on some. Moreover, Binance had earlier said the platform has more than enough funds to meet withdrawal requests. The spokesperson said user assets at Binance are backed 1:1 and their capital structure is debt free.
In regards to USDC withdrawals, the spokesperson said Binance had enough of the USDC stablecoin to meet its withdrawal requests. The crypto exchange needs to move the funds to online hot digital wallets from offline wallets, convert stablecoins from one another, and conduct network upgrades – which may sometimes result in delays.
It should be noted that Binance is also facing a long-running criminal investigation about the platform’s compliance with US anti-money laundering laws and sanctions.