Cryptocurrency exchange Binance has recorded a surge in withdrawals amid concerns regarding the state of the platform’s reserves. On 12 December, the exchange saw its highest daily withdrawals since June, with the figure reaching over $2bn, surpassing other trading platforms, according to data from cryptocurrency analysis platform Nansen. The net outflows impacted Ethereum and other ERC20 tokens on the platform. Investors are still concerned over the state of their holdings on cryptocurrency exchanges following the recent collapse of FTX.
Investors are reportedly concerned over the state of Binance’s reserves following the temporary halting of USD Coin (USDC) withdrawals. Binance CEO Changpeng Zhao cited a token swap issue, but the move has come at a time when investors are already wary following the collapse of FTX and the arrest of its founder, Sam Bankman-Fried.
The situation has led exchanges to publish proof of reserves in a bid to win investor confidence. The withdrawals have also coincided with reports of a possible criminal prosecution of Binance by US regulators, who are reportedly split on whether to charge the exchange with unlicensed money transmission, money laundering conspiracy and criminal sanctions violations. If the charges are formalised, Binance executives, including Zhao, are likely to face legal action in the US.
The news saw Binance’s native token BNB momentarily slump, trading at $278 with gains of less than 1% in the last 24 hours.
