Binance facing billions in net outflows in FTX bankruptcy aftermath
The crypto world was rocked again earlier this week with the arrest in the Bahamas of former FTX CEO and crypto wunderkind Sam Bankman-Fried, and the ripple effect from FTX’s bankruptcy keeps expanding.
A number of leading news outlets have been reporting over the past few hours that FTX rival and once-touted saviour Binance has been experiencing its own troubles, with the crypto exchange facing supposed multi-billion dollar withdrawals.
CNN Business is reporting that investors withdrew as much as $3 billion from Binance on Tuesday, citing data from blockchain analytics firm Nansen, as Binance confronted investor jitters amid a deluge of negative headlines about the crypto industry.
A Nansen spokesperson shared with CNN that a large market maker, Jump, had withdrawn huge sums from Binance with no deposits over the past few weeks, which seems to have caused jitters among both retail and institutional users.
Binance CEO “CZ” Changpeng Zhao, whose @cz_binance handle on Twitter has nearly 8 million followers, tweeted out on Tuesday that:
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. Business as usual for us. I actually think it is a good idea to “stress test withdrawals” on each CEX on a rotating basis.
Early Wednesday he added:
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.
The news does not seem to be bothering crypto prices, which have traded up in the past 24 hours. Ethereum topped the $1,300 mark ($1,322 as at the time of writing) for the first time since early November, and Bitcoin popped up to above $17,800, its best level in more than a month.