The startling collapse of FTX Trading has cast a pall on the entire cryptocurrency sector, sowing fears that even that the world’s biggest exchange for digital assets may not be safe.
Customers of Binance withdrew almost $2 billion worth of crypto assets from the exchange in a single day this week, according to blockchain analytics firm Nansen, noting that users yanked $8.7 billion over a seven-day period. The outflow of capital has forced Binance CEO Changpeng Zhao to respond, and he has sought to temper concerns that the company is in jeopardy.
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In a statement to CBS MoneyWatch, a Binance spokesperson customers withdrew $1.14 billion from the platform in a 12-hour period, but said the transactions were “managed with ease.”
In a a tweet on Tuesday. Zhao called the withdrawals “business as usual for us.”
“We have seen this before,” Zhao, who goes by CZ, said. “Some days we have net withdrawals; some days we have net deposits.”
Things seem to have stabilized. Yesterday was not the highest withdrawals we processed, not even top 5. We processed more during LUNA or FTX crashes. Now deposits are coming back in. 🤷♂️💪 https://t.co/WLK2KyCym0
— CZ 🔶 Binance (@cz_binance) December 14, 2022
But even as Zhao expressed confidence in Binance, he also expects a prolonged slump in the crypto market. In an email to Binance staff this week he warned that the next few months will be “bumpy” at the company, CNBC reported.
“General distrust”
Experts said that for investors the crypto industry has entered an era of FUD — fear, uncertainty and doubt. Customers who use crypto exchanges have watched what happened at FTX and are now wondering if their assets are safe, they said.
To ease customer concerns about their financial stability, Binance, Crypto.com, Kraken and other services have released so-called proof of reserve, or PoR, documents. These amount to a financial snapshot of an exchange,…
