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Binance founder Changpeng Zhao (CZ) has reportedly told employees to expect a difficult few months as the leading cryptocurrency exchange sees customer withdrawals. The warning comes as the crypto industry faces challenges following high-profile bankruptcies and under tightening regulations.
Binance, the world’s largest crypto exchange by trading volume, saw a net outflow of $3 billion on Tuesday, November 13, blockchain research firm Nansen revealed. The news comes as Binance founder and CEO Changpeng Zhao sought to reassure his team that the company is strong enough financially to survive the crypto winter.
Binance Netflow 7D ($) -3,660,311,347
8,783,380,428 – Departure
5.123.069.081 – InflowExchange Flows dashboard ⤵️ pic.twitter.com/vV6vcqoWKK
— Nansen 🧭 (@nansen_ai) 13 December 2022
The coin trading platform has dealt with the impact of a series of negative events in the sector, including the collapse of FTX, a major competitor in the exchange market which filed for bankruptcy protection in November. FTX founder Sam Bankman-Fried was arrested in the Bahamas following charges against him in the US.
A Reuters report on a US Justice Department investigation into Binance was also a factor in investor jitters, according to Andrew Thurman, head of content for Nansen, who commented on the outpouring for CNN. Headlines that prosecutors are considering a money laundering investigation also came against a backdrop of speculation about Binance’s reserves.
Binance currently has $60.4 billion in their publicly disclosed addresses
15.5 billion dollars $BUSD
12.3 billion dollars USD USD
9 billion dollars $BTC
6.2 billion dollars $BNB
6.1 billion dollars $ETH
And others pic.twitter.com/sgr6RTIRYx— Nansen 🧭 (@nansen_ai) 14 December 2022
In a chirping posted on Tuesday, Changpeng Zhao acknowledged the outflow of funds while insisting that Binance has been in similar situations before. “Some days we have net withdrawals; some days we have net deposits. Business as usual for us,” he said, suggesting “it’s a good idea to ‘stress test tap’ each CEX on a rotating basis.”
Meanwhile, the crypto boss also sought to ease concerns about the exchange’s health in a memo addressed to employees. According to a Bloomberg report citing the document, Zhao emphasized that the industry is going through “a historic moment” where Binance is in a strong financial position and “will survive any crypto winter.”
“While we expect the next few months to be bumpy, we will get past this challenging period – and we will be stronger for having been through it,” CZ told the Binance team. Referring to recent developments in the space, he added that the recent collapse of FTX has led to “a lot of extra scrutiny and tough questions” for his exchange.
What do you think the future holds for Binance and other major cryptocurrency exchanges? Share your thoughts on the topic in the comments section below.
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