After Binance reported record $1.9 billion in withdrawals during a 24-hour period between December 12 and December 13, its Chief Executive Officer Changpeng Zhao warned his colleagues to expect tough months ahead.
“While we expect the next several months to be bumpy, we will get past this challenging period – and we will be stronger for having been through it,” Zhao’s internal memo was quoted as saying by Bloomberg.
Binance is the world’s largest cryptocurrency exchange trade platform. The $1.9 billion of withdrawals of tokens based on the Ethereum blockchain mark the largest daily outflow over a 24-hour period since June 13, data compiled by blockchain analytics platform Nansen showed.
Earlier on Tuesday, Binance said that it had “temporarily paused” the withdrawals of the USDC stablecoin. The withdrawals were resumed later on Tuesday.
Both the users as well as the regulators, are closely watching the operational methods of cryptocurrency exchanges such as Binance after its rival crypto exchange platform FTX went bankrupt earlier this month. FTX founder Sam Bankman-Fried was also charged with defrauding customers by the US Securities and Exchange Commission.
FTX’s shock collapse has reportedly hit investor sentiment, prompting some traders to take control of their cryptocurrency tokens. Binance was one of the exchanges hit by large outflows on Tuesday.
At the time of Binance’s resumption for withdrawals of the USDC stablecoin on Tuesday, CEO Changpeng Zhao had assured that the withdrawals were “business as usual”.
“We saw some withdrawals today (net $1.14b ish). We have seen this before. Some days we have net withdrawals; some days we have net deposits,” Binance CEO Changpeng Zhao tweeted on Tuesday.
A Binance spokesperson had earlier said that the platform had “more than enough funds” to meet withdrawal requests.
“User assets at Binance are all backed 1:1 and Binance’s capital structure is debt free,” the spokesperson had said in an official statement.
Binance is a cryptocurrency exchange which is the largest exchange in the world in terms of daily trading volume of cryptocurrencies. It was founded in 2017 and is registered in the Cayman Islands. Binance has no headquarters, and claims to be a decentralised company.
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