The founder of Binance, Changpeng Zhao, has assured users that the exchange will survive any crypto winter after FUD — or fear, uncertainty, and doubt — within the crypto ecosystem caused outflows to spike over $3 billion.
CZ Says Binance Will Survive any Winter as Outflows Spike
In a memo sent to his staff, Changpeng Zhao highlighted that with the recent wave of bankruptcies, the crypto industry is going through a historic moment. Still, he maintains that Binance is in a good financial position and “will survive any crypto winter.”
The Binance boss expects “the next several months to be bumpy, we will get past this challenging period – and we’ll be stronger for having been through it.” The memo comes amidst a sustained wave of withdrawals on Binance.
According to data from the crypto analysis platform Nansen, Binance recorded over $3 billion in net outflows. According to Nansen, the jitters on Binance were worsened by the huge sums withdrawn by Jump, a large market maker.
Binance Experiences FUD
The massive outflow of crypto, which is the highest recorded in the last six months, on Binance was sponsored by FUD — or fear, uncertainty, and doubt — within the crypto ecosystem.
The withdrawals came amidst discussions of a possible bank run on Binance sponsored by concerns regarding the trading platform’s reserves. The large withdrawals also forced Binance to halt withdrawals on USD Coin (USDC) pairs.
On the Flipside
- Although Binance has restored USDC withdrawals, the initial halt has raised concerns about the exchange’s liquidity. Andrew Thurman, Content Lead for Nansen tweeted:
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Jump has net outflows from Binance in excess of $146 million on the week, and no inflowsIf Binance books look like they're completely drained of all liquidity, the exit of possibly the largest MM is probably a good reason whySource: https://t.co/aasol67vsX https://t.co/GbeXfXqwce pic.twitter.com/yLYXgBEsSW— Andrew T (@Blockanalia) December 12, 2022
Why You Should Care
As Binance is the largest crypto exchange, CZ is doing all he can to reassure customers that it will not go through an FTX-like incident.
Get more details about the USDC halt in:
Binance Halts USDC Withdrawals Amid Massive Outflows
Read about the recent allegations against Binance in:
Binance Responds to Allegations that the US DOJ May Charge the Company with Money Laundering