Binance has faced a net outflow of about $831 million in the past 24 hours, according to data firm Nansen. Investors appear to be concerned about regulatory crackdowns on stablecoin Binance USD (BUSD), issued by Paxos.
About $2.8 billion was withdrawn over the past 24 hours, while deposits were about $2 billion, according to Nansen data.
On February 13, the New York State Department of Financial Services (NYDFS) ordered Paxos to stop issuing $16 billion worth of BUSD. The SEC is also reportedly suing the company over BUSD.
BUSD is the third largest stablecoin by market capitalization, accounting for 35% of trading volume on Binance.
The increase in net outflows is the largest per day since November 2022, surpassing December, when the exchange’s report on BUSD reserves alarmed investors, according to crypto manager 21Shares’ data dashboard. was a net outflow.
Binance reserves under scrutiny again
According to Nansen, Binance’s BUSD holdings are around $13.4 billion, second only to Tether (USDT), so the regulator’s move was a major blow to Binance. BUSD accounts for 22% of Binance’s $60 billion holdings.
The withdrawal is testing Binance and its reserves, said Walter Teng, vice president of digital asset research at market analytics firm Fundstrat.
“Assuming Binance does not hold reserves 1:1 against customer deposits, it may face withdrawal pressure. Or replacing it with another stablecoin and responding to customer withdrawals is the only viable option.”
Binance CEO Changpeng Zhao tweeted that customer funds are safe.
#BUSDA thread. 1/8
In summary, BUSD is issued and redeemed by Paxos. #SAFU!
— CZ Binance (@cz_binance) February 13, 2023
｜Translation: coindesk JAPAN
｜Editing: Takayuki Masuda
｜Original: Binance Withdrawals Surge as Paxos-BUSD Drama Weighs on the Exchange
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