Binance, one of the world’s largest cryptocurrency exchanges, saw anxious investors pull out more than $1 billion on Tuesday. Hours later, the company’s CEO, Changpeng “CZ” Zhao. In his message to employees, he appears to be trying to ease market concerns following the collapse of crypto rival FTX.
“Binance will survive any crypto winter,” CZ said in the message.
According to blockchain research firm Nansen, Tuesday’s withdrawal was the exchange’s largest one-day withdrawal total since June.
Using data from Nansen, insider Phil Rosen reported on Wednesday that Binance saw around $3.66 billion in net inflows in the seven days prior to December 13.
In a tweet on Tuesday, CZ tried to allay public concerns about customers withdrawing money. He wrote, today we saw some withdrawals. We’ve seen this before. Some days we have net withdrawals; Some days, we have net deposits. Business as usual for us.
We saw some cash out today (net $1.14b ish). We’ve seen this before. Some days we have net withdrawals; Some days we have net deposits. Business as usual for us.
I think it’s a good idea to implicitly “stress test out” each CX. 💪
– CZ 🔶 Binance (@cz_binance) December 13, 2022
However, CZ stated that Binance expects “the next several months to be brutal” in a message to employees. He added that the company has “passed through this challenging period”.
FTX founder and former CEO Sam Bankman-Fried was arrested in the Bahamas on Monday. CZ also appeared mentioned in the message. He wrote: “In any case, we know we are at a historic moment in crypto. Rest assured, this organization is built to last.
Insider’s request for a response from Binance was declined.
See the note from the CEO of Binance
You may have seen some recent news regarding Binance. The fallout from the FTX implosion brought many more investigations and serious questions. The good news is, even if the news stories don’t always reflect it, we can answer the tough questions thrown at our businesses.
For example, despite today’s news regarding exits, we are in a strong financial position. We often process more than $1b in deposits or withdrawals every day. So, today is nothing unusual. User assets on Binance are all backed 1:1, and Binance’s capital structure is debt-free. We maintain hot wallets to always have more than enough funds to meet withdrawal requests, and replenish hot wallet accounts accordingly.
Regarding questions related to the temporary suspension of USDC withdrawals, we generally hold USDC deposits for future funds, as we automatically convert USDC to BUSD to maintain large liquidity pools. As of today, many people have deposited BUSD or USDT to withdraw USDC. When this happens, we need to change. Our current conversion channels are tricky. In NY dollars we have to go through a bank in USD, which is slow. We will improve this in the future.
With all that is happening, we know we are in a historic moment in crypto. Rest assured, this organization is built to last. As long as we continue to provide users with the best product, user experience and frictionless trading environment – Binance will survive any crypto winter.
While we expect the next several months to be difficult, we will get through this challenging time – and we will be stronger for having gotten through it. As always, I thank each of you for your incredible hard work and dedication and I am proud of the amazing business we have built together.