While Binance is currently battling a media storm, over $1.6 billion was withdrawn from the platform yesterday. Forced to suspend USDC withdrawals, Changpeng Zhao spoke out today to ease tensions: “FUD helps us grow.”
Binance faces massive withdrawals
Whereas Binance is in the spotlight – and its detractors – following the revelations of Reuters on the judicial investigation currently targeting the platform for money laundering, users withdrew about $1.6 billion within just 24 hours.
As a result, the exchange experimented difficulties in making withdrawals in USDC stablecoins and found himself obliged to suspend this feature temporarily. In the aftermath, Changpeng Zhao intervened to reassure customers in the face of the ambient panic:
On USDC, we have seen an increase in withdrawals. However, the channel to swap from PAX/BUSD to USDC requires going through a bank in NY in USD. The banks are not open for another few hours. We expect the situation will be restored when the banks open. 1/2
— CZ 🔶 Binance (@cz_binance) December 13, 2022
Binance CEO explained that trading between PAX Dollar (PUSD) or BUSD stablecoins and Circle USDC require to go through dollars and are managed by a bank in New York. Thus, he explains that “The situation will be restored when the banks open”.
A communication that did not particularly convince, for several reasons. First, it is reminiscent of the justifications of FTX, a few hours before the fall of the platform. But above all, it surprises: why does Binance have to use banking institutions to make transfers on the blockchain?
“We will also try to establish smoother exchange channels in the future”finally specifies CZ, indicating to its customers that they can “withdraw other stablecoins”and mentions in particular the BUSD or the USDT.
👉 Discover the products of the Ledger range and in particular the Ledger Nano X
The best way to secure your cryptocurrencies 🔒
🔥 The world leader in crypto security
CZ wants to calm the “FUD”
The wave of withdrawals currently affecting Binance is part of a rather complicated context. Obviously, the reputation of centralized trading platforms suffers from the fall of FTX. But above all, investor mistrust is reinforced by publication of a Reuters investigation on Binance’s legal cases.
Finally, the publication of the Proof-Of-Reserve of the exchange did not necessarily reassure investors. On the contrary, many players in the ecosystem – like the CEO of Kraken – have warned about the audit process, considered as a “red flag”.
In another tweet, Changpeng Zhao called on Binance investors and users not to fall into the “FUD”namely the panic that is currently spreading around the platform. “FUD helps us grow, even if they are completely boring”he adds.
FUD helps us grow, even though they are thoroughly annoying.
You can FUD about someone without explicitly mentioning their name, which spreads awareness.
It also helps unite their supporters because it forms a common defense alliance.
Short thread. 1/4 https://t.co/PlxhqV5cZS
— CZ 🔶 Binance (@cz_binance) December 13, 2022
At the time of writing these lines, Binance’s BNB is down more than 7% since the beginning of this week, while Bitcoin (BTC) is up more than 3% over this same period, as is the majority of the crypto market.
👉 Also in the news – US justice targets Binance for money laundering, BNB unscrews
Trade on the leading DEX
⛓️ A platform at the heart of DeFi
Newsletter 🍞
Receive a summary of crypto news every Monday by email 👌
What you need to know about affiliate links. This page presents assets, products or services relating to investments. Some links in this article are affiliated. This means that if you buy a product or register on a site from this article, our partner pays us a commission. This allows us to continue to offer you original and useful content. There is no impact on you and you can even get a bonus by using our links.
Investments in cryptocurrencies are risky. Cryptoast is not responsible for the quality of the products or services presented on this page and could not be held responsible, directly or indirectly, for any damage or loss caused following the use of a good or service highlighted in this article. Investments related to crypto-assets are risky by nature, readers should do their own research before taking any action and only invest within the limits of their financial capabilities. This article does not constitute investment advice.
AMF recommendations. There is no guaranteed high return, a product with high return potential involves high risk. This risk-taking must be in line with your project, your investment horizon and your ability to lose part of this savings. Do not invest if you are not ready to lose all or part of your capital.
To go further, read our Financial Situation, Media Transparency and Legal Notices pages.
Journalist for Cryptoast, I strive to dissect every detail of the exciting world of cryptocurrencies and make it accessible and understandable to as many people as possible.
Lilian Aliaga
302 items
