Data from blockchain intelligence firm Nansen revealed that clients withdrew over $1.9B from Binance in the last 24 hours. The $1.9B figure marks the highest volume withdrawn from the exchange within a day since June.
A spokesperson for Nansen noted that the development can be attributed to the recent concerns about its Proof-of-Reserve (PoR) audit. This is because Mazars' PoR audit revealed that contrary to Binance’s claims, the exchange was only 97% collateralized. Moreover, the number excluded the assets lent to Binance users via margin and loan services. In the words of former SEC regulator John Reed Stark,
"Binance’s 'proof of reserve' report doesn’t address effectiveness of internal financial controls, doesn’t express an opinion or assurance conclusion and doesn’t vouch for the numbers."
Binance has also come under regulatory scrutiny from the US Department Of Justice, thus increasing the FUD (fear, uncertainty, and doubt) surrounding the exchange's operations.
Binance’s CEO Changpeng Zhao responded by claiming that the recent spike in withdrawals was a common occurrence for the firm, adding,
“We have seen this before. Some days we have net withdrawals; some days we have net deposits. Business as usual for us.”
Binance also temporarily suspended USD Coin (USDC) withdrawals. Zhao noted that swapping BUSD or PAX to USDC requires routing through a New York bank that is currently closed. He acknowledged the increase in USDC withdrawals and claimed that Binance will establish more “fluid swap channels” in the future.
