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CZ, Justin Sun Assure Markets Following Surging Binance Withdrawals

2 mins
Updated by Ryan Boltman
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In Brief

  • Binance has experienced a surge in withdrawals over the past pair of days.
  • Chief executive Changpeng Zhao said USDC withdrawals had been suspended due to a token swap.
  • Meanwhile, Tron founder Justin Sun combats cashing out rumors with on-chain evidence of deposits.
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Binance Chief Executive Changpeng Zhao and Tron founder Justin Sun have responded to the recent flurry of withdrawals from Binance.

Binance, the world’s largest crypto exchange by trading volume, experienced a surge in withdrawals over the past few days. The withdrawals, as shown by Nansen data, were triggered by concerns over the exchange’s proof of reserve report.

Net outflows on Binance amounted to $902 million going into Monday, almost nine times larger than the second-largest outflow. However, given the exchange’s $64 billion in assets, one analyst said the outflow “doesn’t seem notably anomalous.” 

Meanwhile, Nansen reported that Binance experienced an additional $1.6 billion net outflow in Ethereum tokens over the past day. While this put the exchange’s 7-day Netflow at -$1.9 billion, it is currently still less than the -$2.3 billion in outflows following the FTX collapse.

Changpeng Zhao response

In response to the increase in withdrawals, Zhao addressed the withdrawal of stablecoin USDC specifically. Referencing his statement, Binance announced that it had been conducting a token swap with USDC. Consequently, it said that USDC withdrawals have temporarily been paused, but would be restored upon completion.

In his statement, Zhao commented that “the channel to swap from PAX/BUSD to USDC requires going through a bank in NY in USD.” However, he acknowledged that these banks would not open for another few hours, but expected the situation to be restored once they did.

Justin Sun transactions

Meanwhile, some of the FUD surrounding Binance’s withdrawals had to do with rumors that Justin Sun was cashing out. Sun had reportedly transferred $34 million BUSD and $15.4 million USDT from Binance to Paxos and Circle. 

In order to calm market fears, Sun tweeted that he in fact deposited $100 million USDC into the exchange. He included a link to Etherscan, so others could verify his transactions. Zhao also referenced Sun’s post, saying it likely had to do with deploying BUSD on Tron through cross-chain swaps.

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Nicholas Pongratz
Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage.
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