Binance CEO: It Won't Collapse and It's Not Like FTX, But 60 Billion Protects Binance From "Bankruptcy"

Binance CEO Changpeng Zhao said today that the situation on the Binance cryptocurrency exchange has "stabilized" in an attempt to allay investor fears after the company was forced to cancel yesterday's coin withdrawal after the withdrawal reached $1.9 billion, according to the blockchain firm. . Nancy.

Zhao said about $1.14 billion was withdrawn on Tuesday, but he tweeted that it was "not the largest payout we have ever processed, even among the [top five] largest." The CEO also revealed that the deposits will return to Binance.

His comments come after Binance temporarily suspended withdrawals from the USDC stablecoin on Tuesday as it implemented a “token swap.” Zhao said that Binance has seen an increase in USD withdrawals. The suspension of withdrawals was due to the fact that some currency exchanges had to go through an unspecified New York bank that was not open, Zhao said. Binance has resumed withdrawals after an approximately eight-hour hiatus.

The incident left investors baffled, especially after the collapse of the FTX cryptocurrency exchange and the arrest of its founder, Sam Bankman-Freed, who faces federal criminal charges.

Analyst firm Nansen said on Tuesday that more than $3 billion has been withdrawn from Binance in the past seven days. But Nansen chief executive Alex Swanzhek said the situation is different from that of FTX, which has withdrawn "billions of dollars."

“I would say that you are definitely seeing bigger than usual drawdowns from Binance. So this is definitely worth keeping an eye on, but as far as I know at the moment, it is completely different from the FTX mode.

Svanevik noted that Binance has $60 billion of assets on the exchange, of which withdrawals are a small percentage, and Binance Zhao also tried to demonstrate a sense of power within Binance.

“While we expect the coming months to be eventful, we will get through this difficult time and we will be stronger because we got through it,” Zhao wrote in an internal memo seen by Bloomberg.

Investors have called for greater transparency in Binance's operations. The company released a booking guide last month, claiming a booking rate of 101%. This means that you have enough resources to cover client deposits.

But critics have said that proof of reserves is not enough to guarantee Binance's guarantee. Mazars, the accounting firm used by Binance to verify reserves, said in a five-page report in November that the company "does not express a favorable opinion or conclusion."

A Binance representative was not immediately available for comment when approached about the content of this memorandum and criticism of the company's reserve review.