Binance’s latest proof of reserve has been the cause of concern for investors. A report by Nansen revealed that crypto market maker Jump Trading became the largest withdrawer from Binance.
Jump’s net withdrawals from the exchange came to be $146 million of digital assets in the past seven days, analyst Andrew of Nansen noted.
These withdrawals included $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]. The tweet further read,
Normally Jump has massive inflows/outflows to exchanges This time is different — Jump has redeemed $245 million in BUSD on the month, $106 million in the past week, and $30 million in the past 24 hours Working very hard to cash out & not get burned again.
Investors began to rush in withdrawing funds after a Reuters report about the U.S. prosecutor’s office considering charging Binance and its executives with money laundering and sanctions violations.
CEO Changpeng Zhao or CZ slammed the news as FUD [fear, uncertainty, and doubt] and urged everyone not to worry.
Having said that, there has been a general unease over Binance’s financial health.
Tron’s Justin Sun recently withdraw a total of $50 million from the exchange, which might have further exacerbated the panic. Sun then made an effort to ease the tension by tweeting a link to Etherscan where he had redeposited $100 million USDC into the exchange.
Binance’s Withdrawals Hit Nearly $2B In 24 Hours
On-chain data by Nansen also showed withdrawals across all chains have hit almost $2 billion in a span of 24 hours. Some of the recipients of this inflow included Paxos and Huobi.
Following the reports, Binance tweeted that it was temporarily suspending USDC withdrawals as it engages in a token swap between USDC and BUSD [which is managed by Paxos].
CZ clarified that until the bank launches operations in the United States, it will not be possible to update the account ledgers necessary for this swap at a New York-based bank. He added that Sun’s Binance deposit was a step in the deployment of BUSD onto TRON.
“These are 1:1 conversions, no margin or leverage involved. We will also try to establish more fluid swap channels in the future. In the meantime, feel free to withdraw any other stablecoin, BUSD, USDT, etc,” he added.