Binance, the world’s largest crypto exchange by trading volume, has endured some $831 million of net outflows in the past 24 hours, according to blockchain intelligence firm Nansen’s data. Investors appear to be spooked by a regulatory crackdown on the Paxos-issued Binance USD (BUSD) stablecoin and so are reducing their holdings on the platform.
Blockchain data on Nansen shows users withdrew some $2.8 billion of digital assets in the last 24 hours, outweighing the $2 billion of deposits during the same period.
The withdrawals have followed the New York Department of Financial Services ordering Paxos on Monday to halt issuing the $16 billion BUSD stablecoin and a looming enforcement action by the U.S. Securities and Exchange Commission (SEC). Issued under the Binance brand, BUSD is the third-largest stablecoin and accounts for 35% of all Binance trading volume.
Binance reserves tested, again
Given the large chunk of Binance-related assets on the platform, the withdrawals tested Binance and its reserve assets, Walter Teng, vice president of digital asset research of market analysis firm Fundstrat, wrote to CoinDesk in a Telegram chat.
“Assuming Binance doesn't hold customer deposits 1:1, they might face withdrawal pressure,” Teng said. “On-chain liquidity for BUSD has already dried up, making redemption of BUSD for U.S. dollars or an alternate stablecoin to then meet customer withdrawals as the only viable option.”
Changpeng “CZ” Zhao, chief executive of Binance, assured investors in a tweet that customer funds are safe.
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