Binance’s net withdrawals exceeded $3.6 billion last week, with Changpeng Zhao saying it should be seen as a “stress test” that will prove the company’s solvency.
Analysts at Nansen note that from December 7 to 13, assets worth ~$8.78 billion were withdrawn from Binance accounts, while inflows amounted to ~$5.12 billion. Therefore, net withdrawals topped ~$3.6 billion.
Liquidity losses have been observed on many levels. For example, daily net inflows of ERC-20 tokens on Binance exceeded $2 billion in November, but net outflows were over $1 billion from December 12-13.
Nansen experts assume that such a situation could be caused by large market makers exiting the exchange. For instance, Wintermute withdrew nearly $300 million, and Jump Finance redeemed more than $135 million. According to Coinglass, users withdrew 30,300 BTC (~$515 million) from Binance during December 13. Hence, analysts state that Binance’s liquidity has declined.
Supposedly, the FUD effect was triggered by a piece by Reuters. Journalists reported that the U.S. Department of Justice (DOJ) has nearly completed its investigation into Binance, which has been ongoing since 2018, and prosecutors are close to initiating criminal proceedings against the company and its executives. There has been no official statement from the DOJ on the matter, but Binance has denied the Reuters data, calling it incorrect.
The FUD effect was further amplified by expert statements on the questionable nature of Mazars’ audit of Binance’s reserves. All this happened amid FTX’s collapse, which fundamentally weakened user confidence and triggered serious outflows from CEX accounts. However, Binance CEO Changpeng Zhao said the current situation was good for the company as it would serve as a “stress test” and prove its solvency. He earlier suggested that the industry had become “healthier” after FTX’s crash.
