Binance Withdrawals Surge to $3 Billion In a Day

Nervous crypto investors withdrew as much as $3 billion from Binance on Tuesday, as reported by blockchain analytics firm Nansen.

The world’s biggest cryptocurrency exchange, confronted by investor jitters amid a stream of negative headlines about the industry, said it had “temporarily paused” withdrawals even as CEO Changpeng Zhao said it was “business as usual.”

Since the collapse of rival crypto exchange FTX, Binance has come under scrutiny from users and regulators for how it handles customer deposits. In response, Binance last week published a so-called “proof-of-reserves report” by audit firm Mazars. The report showed its holdings of Bitcoin exceeded customer deposits on a selected single day in November.

When pressed yesterday on high numbers of withdrawals, Zhao was philosophical, claiming, “We saw some withdrawals today. We have seen this before. Some days we have net withdrawals, some days we have net deposits.”

Crypto investors everywhere are trying to decide what to do in the face of a “crypto winter” sparked by the collapse of crypto institutions like Terraform Labs and now FTX. 

In what is a terrible look for the crypto industry that is fighting for legitimacy as a viable alternative to fiat money, Sam Bankman-Fried, the founder of FTX, was arrested in the Bahamas this week after US prosecutors filed criminal charges against him. Binance, now comfortably the largest crypto exchange in the world, has already been under pressure from authorities to be more transparent.