Binance Sees Over $3 Billion in Customer Withdrawals in 24 Hours – Here’s What’s Happening
Binance, the world's largest cryptocurrency exchange, has seen more than $3 billion of net withdrawals over the past day as rumors about alleged problems at the platform spread like wildfire.
According to DeFi TVL aggregator DefiLlama, Binance saw over $4 billion in withdrawals on Tuesday. Prior to that, the exchange saw $1 billion in withdrawals on Monday and Tuesday. As of now, Binance has around $60 billion worth of assets on its exchange.
A separate tweet from blockchain analytics firm Nansen revealed that Binance has seen $8.7 billion of outflows and only $5.1 billion of inflows over the past week, leaving the exchange with more than $3.6 billion of net withdrawals.
The recent withdrawals come as some crypto experts have criticized Binance's audit, which was conducted by Mazars, and claimed that the exchange's bitcoin reserves have a 101% collateralization ratio. However, the figures essentially state Binance’s bitcoin is 97% collateralized, which was highlighted by Kraken co-founder Jesse Powell.
“The 3% ‘gap’ is due to BTC loaned to customers, through the margin or loan programs, who may have used tokens out of the report’s scope as collateral. If we take these into account (in other words, if we didn’t provide these BTC loans), we would be 101% collateralized,” a Binance spokesperson tweeted in response.
Powell was not apparently sold. “Big red flag for me is that this seems to be more of an attempt at proving collateral rather than proving reserves,” he said. “They even admit to be insolvent with regard to actual assets owed vs tokens controlled. The ‘collateral’ accounting trick is exactly how FTX played solvent as well.”
Moreover, John Reed Stark, former chief of the SEC Office of Internet Enforcement and vocal
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