The largest crypto exchange by trading volume is undergoing a stress test as reports surface that Binance may be under US investigation.
Yesterday, it was reported that Binance and its CEO Changpeng Zhao were under federal investigation for potential money laundering violations.
Now, crypto data analyzer Nansen says over $3 billion in net capital has been withdrawn from Binance over the last seven days.
“Binance Netflow 7D ($) -3,660,311,347
8,783,380,428 – Outflow
5,123,069,081 – Inflow”
According to Binance CEO Changpeng Zhao, the exchange saw over $1 billion in withdrawals leave the exchange yesterday alone.
“We saw some withdrawals today (net $1.14 billionish). We have seen this before. Some days we have net withdrawals; some days we have net deposits. Business as usual for us.
I actually think it is a good idea to ‘stress test withdrawals’ on each CEX (centralized exchange) on a rotating basis.
It costs some network fees to run these ‘tests’. But keeps the industry healthy.
Exchange business is simple.”
Following the collapse of FTX, crypto exchanges have seen increased scrutiny over the transparency of their finances, prompting many to provide proof-of-reserves reports, including Binance. The reports haven’t satisfied everybody, and some, including Kraken founder Jesse Powell have spoken out to criticize the reliability of them.
Powell said he wasn’t trying to spread fear or rumors, but did see some potential red flags in Binance’s latest report.
“Big red flag for me is that this seems to be more of an attempt at proving collateral rather than proving reserves. They even admit to [being] insolvent with regard to actual assets owed vs tokens controlled. The ‘collateral’ accounting trick is exactly how FTX played solvent as well.”
According to a recent review from Mazars, Binance has more than enough reserves to back its users’ Bitcoin (BTC), and all withdrawals from the exchange are so far being processed smoothly.
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The post Binance Sees More Than $3,660,311,347 in Net Withdrawals As World’s Largest Crypto Exchange Gets ‘Stress Test’ appeared first on The Daily Hodl.
