Nansen, a blockchain analytics firm, proclaimed earlier today that Binance, the largest global cryptocurrency exchange, has experienced an outflow of around $831 million in the last 24 hours. Further, Binance users have withdrawn approximately $2.8B in virtual currency, exceeding the $2B in inflows within the same span.
As a result, investors have been quick to voice their concerns over the recent outflow, with many worried about the potential impact on the cryptocurrency market.
According to reports, this is the most significant withdrawal in Binance since FTX’s insolvency in November 2022. At that time, Binance’s net flow had hit $902 million. In addition, fear, uncertainty, and doubt (FUD) swept the market, and FTX’s bankruptcy only exacerbated the instability.
Binance CEO CZ addresses FUD concerns
The CEO of Binance, Changpeng Zhao, has reassured investors that the recent controversy surrounding Binance is baseless and short-lived. He suggested that everything would soon resume its previous course. Furthermore, there is speculation that the present onslaught is creating an opening for leading stablecoins to introduce a new order in the market.
Notably, it is worth noting that Binance has not been immune to issues in the past. The platform has faced criticism for its handling of customer data and has been accused of market manipulation in the past. However, the platform has always been able to bounce back and regain the trust of its users.
Binance outflow implications
Experts in the industry argue that investors are wary as an outcome of the latest onslaught on Binance’s stablecoin BUSD, in partnership with Paxos. The veracity of these claims, however, is not readily apparent.
In a preceding report by Tokenhell, the Securities and Exchange Commission issued a Wells notice to Paxos Trust Co., alleging that the company had breached investor protection legislation in its issue of the Binance USD (BUSD) stablecoin.
Consequently, Paxos was instructed by the New York Department of Financial Services to cease issuing new BUSD. Positioned as the 3rd biggest stablecoin by market capitalization, Binance USD (BUSD) makes up 35% of all trading volume in Binance.
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