Binance Withdrawals Surge as Concerns About Its Reserve Report Spook Traders

Binance Withdrawals Surge as Concerns About Its Reserve Report Spook Traders

Binance, the world’s largest crypto exchange by trading volume, endured a wave of withdrawals on Monday amid concerns about its proof of reserve report.

Net outflows, the difference between the value of assets arriving and leaving the exchange, hit $902 million in the past 24 hours, according to data by blockchain intelligence platform Nansen.

Binance’s net outflow has surpassed those of all other centralized exchanges’ in the last 24 hours, and is almost nine times larger than the second largest outflow.

The outflow was the highest for Binance since Nov. 13, two days after FTX filed for bankruptcy protection, according to data provided by blockchain data platform Arkham Intelligence.

However, the outflow “doesn’t seem notably anomalous,” Henry Fisher, an Arkham analyst, wrote in a Telegram chat, given that there are ostensibly $64 billions of assets on Binance.

Withdrawals rose following a string of concerning news reports about Binance, and as investors have become increasingly cautious about their funds on centralized exchange. The swift collapse of rival exchange FTX, piled on other industry debacles, has prompted other exchanges to prove that they are safeguarding customers’ assets.

Binance released a report by auditing firm Mazars last week claiming that its bitcoin (BTC) reserves are overcollateralized. Industry experts and recent reports flayed the document for its narrow scope, and on Monday, Reuters reported that U.S. prosecutors are mulling criminal charges for possible money laundering against Binance and its executives, including Zhao.

Binance didn’t reply to a request for comment. Changpeng Zhao, founder and CEO, urged his followers to “ignore the FUD” – crypto slang for spreading fear, uncertainty and doubt – in a tweet.

Read more: Binance Suspends Account of Customer for Being ‘Unreasonable’

Blockchain data shows that large crypto market makers Jump Trading and Wintermute were among those moving sizable funds from Binance in the past seven days.

Jump Trading appears to be the largest withdrawer from Binance, Nansen analyst Andrew Thurman wrote in a tweet.

Net withdrawals from the exchange by crypto wallets associated with Jump reached $146 million of digital assets through the past seven days, data compiled by Nansen shows.

Jump’s net withdrawals include $102 million in Binance USD (BUSD), the exchange’s stablecoin issued by Paxos; $14 million of Tether’s USDT; and $10 million of ether (ETH).

Jump redeemed some $30 million of Binance USD (BUSD) from Paxos a few hours ago, per blockchain data from Arkham.

Wintermute, another significant crypto market maker, withdrew $8.5 million of wrapped bitcoin (wBTC) and $5.5 million of Circle’s USDC stablecoin.

At the time of publication, Jump Trading and Wintermute had not responded to CoinDesk requests for comment.

Wintermute acknowledged in a tweet on Nov. 9 that some funds remained on Sam Bankman-Fried’s crypto exchange FTX, which imploded last month in spectacular fashion. Jump Trading tweeted on Nov 12. that the firm remained well-capitalized, but didn’t specify losses or capital exposure to FTX.

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