LONDON: The world’s largest cryptocurrency exchange, Binance, announced on Tuesday that it has “temporarily suspended” withdrawals of the USDC stablecoin. Nansen, a blockchain data company, reported that $1.9 billion in withdrawals had been made in the previous 24 hours.
Users and regulators are closely monitoring how cryptocurrency exchanges like Binance and its ex-rival FTX, which is now bankrupt, handle consumer deposits. Sam Bankman-Fried, the founder of FTX, was accused of defrauding investors on Tuesday by the U.S. Securities and Exchange Commission.
The demise of FTX solidified Binance’s supremacy in the cryptocurrency market, and last week it tweeted a purported proof-of-reserves report from audit company Mazars. The study revealed that on one day in November, its bitcoin holdings were greater than what customers had deposited.
According to Nansen data, the $1.9 billion in withdrawals of ethereum-based tokens represents the highest 24-hour outflow of assets since June 13 and is responsible for most of the money taken out during the previous seven days.
As stated by a Nansen spokeswoman, “Binance’s withdrawals are rising due to the growing doubt over their reserves report.”
Business as usual, as stated by the CEO of Binance, Changpeng Zhao, regarding the withdrawals.”Today there were a few withdrawals (approximately a net $1.14 billion).” This has previously occurred.
A spokeswoman for Binance earlier stated that the company always had “more than enough liquidity” to fulfil withdrawal requests. The person stated that “User assets at Binance are completely backed 1:1 and Binance’s capital structure is debt free.”
When asked if Binance had enough USDC to fulfil USDC withdrawal requests, the representative stated that there would be delays if monies needed to be transferred from offline wallets to online “hot” digital wallets, stablecoins needed to be converted, or network enhancements needed to be made.
