Solvency fears around the world’s largest crypto exchange appear to have been put to rest – at least for the time being.
On Tuesday, Nansen reported that Binance witnessed its highest level of daily withdrawals since June. Data showed that the crypto exchange processed at least $2 billion worth of outflows from Ethereum and ERC-20 tokens, and an additional $1 billion in Bitcoin outflows.
Binance 24H net outflow has increased to $3B
Source: https://t.co/bkRLuBPCtq
Their disclosed holdings show that they have over $62.5B as of now: https://t.co/x1ITMCFg26 pic.twitter.com/PG4C85hmSV
— Nansen 🧭 (@nansen_ai) December 13, 2022
These large withdrawals were likely triggered by panicked investors, both retail and institutional, after controversial reports emerged around the authenticity of the exchange’s Proof-of-Reserves audit.
Binance CEO Changpeng Zhao addressed the scale of outflows in a tweet late on Tuesday.
“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,” tweeted Zhao.
“I actually think it is a good idea to ‘stress test withdrawals’ on each CEX on a rotating basis,” he added.
Some users that processed withdrawals appeared to confirm that the process unfolded without any hold ups.
On-chain analysis also uncovered Binance’s balance held across a number of cold wallets, which are offline and less vulnerable to hacks. A list compiled by The Block’s VP of Research Larry Cermak found that Binance held $62 billion worth of crypto in these wallets.
wait binance have 60 billion in cold wallets? dis seems like 420 magnitudes more professional than ftx scrambling in absolute shit defi farms just to meet last few redemptions before they 0'd and ftx barely had a cold wallet so why are ppl scared https://t.co/jnQBNkWnVd pic.twitter.com/o2o4OVDtk4
— CL (@CL207) December 13, 2022
According to DeFi researcher Ramsy, the rate of withdrawals on Binance have slowed down rapidly, suggesting most of the fear has passed.