LONDON/SINGAPORE, Dec 14 (Reuters) – The head of major cryptocurrency exchange Binance said on Wednesday that deposits were returning, a day after seeing large outflows from cryptocurrencies and halting some withdrawals from stablecoins.
On Tuesday, blockchain data firm Nansen said Binance saw $1.9 billion in withdrawals in 24 hours, the largest outflow since June. Users had withdrawn $3.7 billion in crypto in the seven days to Tuesday, he added later.
Binance, the world’s largest crypto exchange, also temporarily halted withdrawals of the major USDC stablecoin, citing so-called “token swapping.”
“Looks like things have stabilized,” tweeted CEO Changpeng Zhao. “Yesterday wasn’t the highest withdrawals we processed, not even the top 5.”
[1/3] Smartphone with Binance logo shown and representation of cryptocurrencies are placed on keyboard in this illustration taken November 8, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
Binance has seen net inflows in the past 24 hours of tokens on the ethereum blockchain totaling about $718 million, Nansen told Reuters. Binance did not immediately respond to a request for comment.
How crypto exchanges such as Binance and its now-bankrupt former rival FTX manage customer deposits has come under close scrutiny from users, regulators and policymakers.
Binance said on Tuesday that it always had “more than sufficient funds” to handle withdrawal requests. “Binance users’ assets are backed 1:1 and Binance’s capital structure is debt-free,” a spokesperson said.
The exchange also faces legal pressures. Divisions among US Justice Department prosecutors are delaying the conclusion of a long-running criminal investigation focused on Binance’s compliance with US anti-money laundering laws and sanctions, Reuters reported on Monday, prompting a drop of 4% on Binance’s own BNB token.
Nansen CEO Alex Svanevik told CNBC that the report had caused “concern in the market” with investors wary and pulling the crypto off exchanges.
“FUD brought a ‘stress test’, which in turn helps build the credibility of exchanges that pass the test,” Zhao tweeted on Wednesday, using an often-used acronym for “fear, uncertainty and doubt” in cryptography in relation to news perceived as negative.
Reporting by Tom Wilson and Rae Wee; edited by Gerry Doyle, Jason Neely and Louise Heavens
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