Investors have been pulling billions of dollars of funds off Binance amid growing scrutiny over the crypto exchange's reserves. On Tuesday afternoon, more than $6.6 billion in crypto had left the exchange over a 24-hour period, according to Nansen. Outflows over the past seven days stand at about $12.1 billion, compared with $9.5 billion of inflows. This has investors spooked about the health of Binance in the wake of former competitor FTX's spectacular downfall, which ended Tuesday with CEO Sam Bankman-Fried's arrest and indictment . It remains to be see how wide the damage done by FTX spreads in the crypto market. Binance CEO Changpeng Zhao, known as CZ, addressed the activity on Tuesday in a tweet , calling it "business as usual" for the company and suggesting centralized exchanges adhere to "stress test withdrawals." "The withdrawals shouldn't be an issue if Binance has been responsibly segregating customer funds," said Noelle Acheson, an economist and writer at newsletter Crypto is Macro Now. "If that's not the case, I imagine we'll find out the hard way and that would be very bad for the market." "If Binance is able to demonstrate that it has been taking good care of customer funds, those deposits should flow back in once investors feel more confident," said Acheson, who was the former head of market insights at Genesis. "Two things Binance has going for it are a strong and loyal customer base, and also it hasn't thrown money around on stadiums, celebrities and low-diligence venture investments." CZ said Wednesday that deposits are coming back, but he sees a "bumpy road ahead" for the firm. Reality check Binance holds about $62.6 billion on its platform, the majority of which is denominated in the stablecoin Binance USD, tether, bitcoin and ether. The spike just isn't that big, according to analysts. There's a lot of "undue fear" right now, Bernstein analyst Gautam Chhugani told CNBC, adding that Binance has the reserves "to fully honor the withdrawals." "There might be exogenous risks or regulatory risk for the exchange – we're hearing lots of those rumors – but the risk of depositor money simply not being there, which is what happened with FTX, is far more unlikely," Nansen's Andrew Thurman said. According to data from CryptoQuant, Binance's bitcoin reserve lost 8% over the past two days but CEO Ki Young Ju noted there was a 24% increase during the run on FTX in November. The net outflows themselves are small relative to what FTX saw in November, he added. FTX saw some $1.3 billion in net outflows in November, with just about $5 billion in assets in their reserves, whereas Binance saw $3 billion in outflows at the 24-hour peak Tuesday, although the exchange has more than $60 billion in various digital assets in its reserves, according to Thurman. Thurman said the event seemed to be market jitters, but that it was notable in that it happened for both retail investors as well as "more sophisticated" participants. Clara Medalie, research director at crypto data firm Kaiko, said liquidity on Binance has stayed stable and bitcoin's market depth is holding steady. Fear and uncertainty The angst began after Binance tweeted last week that it had performed a proof-of-reserves audit by the firm Mazars, which showed its bitcoin holdings had exceeded customer deposits as of Nov. 22. The so-called audit was meant to quell investor worries in the aftermath of November's FTX spectacular. After the Binance CEO helped spur a "run" on FTX, the once-popular exchange was quickly found to have insufficient reserves to cover outstanding liabilities. Other exchanges are feeling the pressure now to offer transparency to customers about their own reserves. Since then, industry observers have identified several ways in which the report came up short and failed to revive investor confidence. Critics have noted that Mazars isn't one of the big-four accounting firms and it allowed Binance to set the audit terms. Rather than showing total assets and liabilities, the audit was limited to bitcoin assets and liabilities, and the report didn't provide a clear assurance conclusion. "Overall, I think a large increase in withdrawals could be difficult for any exchange after the FTX collapse because there remain many questions on the reliability of proof-of-reserves," said Medalie. " Self-custody is the safest option for traders in a volatile exchange environment." Given the recent experience with FTX, many are taking funds off Binance just in case, Acheson said, "for the sake of prudence." The withdrawals also come at a time when the U.S. Department of Justice prosecutors are reportedly delaying the conclusion of a criminal investigation into Binance's compliance with U.S. anti-money laundering laws and sanctions that began in 2018. On Tuesday, Binance also paused withdrawals of the stablecoin USDC while it carried out a "token swap." They resumed eight hours later.