| crypto currency news | Binance suffers $1bn outflow in one day as crypto jitters spread
The CEO of the world's largest cryptocurrency exchange Changpeng Zhao is trying to reassure investors after the collapse of FTX
Investors have pulled more than $1 billion from Binance as the world's largest cryptocurrency exchange grapples with a crisis of confidence in digital tokens and fears they could also be drawn into US investigations.
Changpeng Zhao
Changpeng Zhao, chief executive of Binance, said the exchange saw $1.14 billion in net withdrawals on Tuesday as users continued to withdraw their assets from its market. Seven-day net withdrawals had exceeded $3.6 billion, according to an analysis conducted by blockchain research group Nansen.
FTX
The outflow underscores the jitters that have spread through cryptocurrency markets since the collapse last month of FTX, one of the largest firms in the industry. Sam Bankman Fried, the founder of the stock exchange FTX, was charged with fraud in the United States on Tuesday.
Nansen said the rapid withdrawals were the largest since June when the digital asset market was dragged into an unprecedented market crash that saw the value of popular tokens plummet.
Zhao downplayed the volume of transactions on the platform, stating, "It's business as usual for us." "Some days we have net withdrawals in the exchange; some days we have net deposits," Zhao said on Twitter.
Investors pulled large amounts of bitcoin from cryptocurrency exchanges last month due to concerns about the security of their assets. Cryptocurrency exchanges such as Binance hold the client's assets while providing a place to trade.
Binance said it has more than $60 billion in assets, which is enough money to process withdrawals. However, the company's disclosures do not include its liabilities, which makes it difficult to assess its financial position. The exchange told the Financial Times that all customer deposits are backed by matching assets and that its "capital structure is debt-free".
Concerns about Binance intensified this week after a Reuters report on Monday that Binance is under criminal investigation in the United States for its handling of U.S. money laundering and sanctions laws. Binance said it would not be appropriate to comment on a US investigation.
Regulators thoroughly review every crypto company regarding many of the same issues. This nascent industry is growing rapidly, and Binance has demonstrated its commitment to security and compliance.. Earlier this week, Binance responded to more than 47,000 law enforcement requests over the past year.
The exchange said on Tuesday it has temporarily suspended withdrawals of USDC token, a crypto token that matches the value of the US dollar, while it conducts a "token swap" involving the currency. He added that he then resumed withdrawals, while other stable currencies that track the dollar were not affected.
