Binance CEO Changpeng Zhao said on Wednesday that his cryptocurrency exchange had “stabilized” to allay investor concerns after the corporate was forced to halt stablecoin withdrawals.
Zhao said about $1.14 billion in net withdrawals took place on Tuesday, but tweeted that “these weren’t the very best withdrawals we have processed, not even the very best [five]The CEO said deposits are coming back to Binance.
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His comments come after Binance temporarily halted USDC stablecoin withdrawals on Tuesday while it conducted “token swaps.” Zhao said that Binance has seen a rise in USDC withdrawals. In response to Zhao, the payout holdup was because of the indisputable fact that some currency swaps needed to be routed through an unspecified Recent York bank that was not open. Binance resumed withdrawals after about eight hours of downtime.
The episode left investors on edge, particularly after the collapse of cryptocurrency exchange FTX and the next arrest of its founder Sam Bankman-Fried, who faced federal criminal charges.
Blockchain analytics firm Nansen said on Tuesday that greater than $3 billion in net withdrawals had been constituted of Binance prior to now seven days. But Nansen CEO Alex Svanevik said the situation was different from FTX, which saw payouts of “multi-billion dollars.”
“I might say you are definitely seeing greater than usual payouts from Binance. So it’s definitely value maintaining a tally of, but so far as I do know at this point, it is very different from the situation with FTX,” Svanevik told CNBC’s Capital Connection on Wednesday.
Svanevik noted that Binance has roughly $60 billion in assets on its exchange, of which payouts account for a small portion.
Binance’s Zhao also tried to point out a sense of power inside Binance.
“While we expect the following few months to be bumpy, we’ll get through this tough time – and we’ll be stronger because we have been through it,” Zhao wrote in an internal memo he saw Bloomberg.
A Binance spokesperson declined to comment on the contents of the memo.
Investors have called for more transparency in Binance’s operations. Last month, the corporate issued a proof of reserve claiming to have a reserve ratio of 101%. Because of this it has sufficient assets to cover customer deposits.
But critics said the proof of reserves didn’t go far enough to provide Binance collateral guarantees. Mazars, the Binance auditing firm used to verify the reserves, said in its five-page November report that the firm “is not expressing an opinion or assurance.”
Zhao said during a Twitter conversation on Wednesday that he maintains one-to-one user asset reserves. He also said the corporate intends to release one other batch of proof of reserves in “one other pair”. [of] weeks”.
A Binance spokesperson told CNBC via email that taking proof of ownership of a fiduciary reserve is a complicated endeavor, adding that more information is coming soon.
“Properly carrying out a review of deposit reserves of this scope and scale is a very complex process that is recent and unique to the industry and requires a different degree of internal and external verification within the chain than traditional financial institutions,” the spokesperson said.
“BTC Freeing [bitcoin] Trust Reserves was just the primary of many steps in the approaching weeks to bring greater transparency and certainty to our Trust Reserves.
Binance added that given recent events, the corporate is attempting to develop recent methods of verifying stored assets to regain users’ trust.