Binancen withdrawals surged to $3 billion in 24 hours, says Nansen

Hong Kong

According to blockchain analytics firm Nansen, investors withdrew up to $3 billion from Binance on Tuesday as a spate of negative headlines about the cryptocurrency industry rocked users of the world’s largest exchange.

Andrew Thurman, content lead at Nansen, told CNN that at its peak, Binance saw “net outflows of up to $3 billion” over a 24-hour period. A report of an ongoing US Department of Justice investigation into the stock market is a factor in investors’ nervousness, he said.

“At the same time, it was discovered that a major market maker, Jump, has been making massive no-deposit withdrawals from Binance over the past few weeks — which ultimately appears to have caused concern among both retail and institutional users,” Thurman said. “In short, there’s a lot of money coming out, and that scared some people.”

Jump Crypto is part of the Jump Trading Group, a quantitative trading firm.

Binance CEO Changpeng Zhao said that the exchange had seen “some withdrawals” of around $1.1 billion at one point. The company had seen worse days before, he later added.

“We’re already seeing the money coming back,” he said in a conversation on Twitter Spaces on Wednesday, in which he described the withdrawals as “perfectly normal market behavior.”

Zhao, who is known as “CZ,” said that people were in the crypto sector after FTX collapsed in November. The founder of former Binance competitor Sam Bankman-Fried was arrested in the Bahamas this week after US prosecutors filed criminal charges against him.

“If you get hurt by one bank, you will think all other banks are bad,” Zhao said. “The fact is, just because one bank is bad doesn’t mean all other banks are bad.”

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Concerns about the health of the sector have depressed the price of digital coins. Bitcoin was last trading below $18,000, down more than 60% year-to-date.

But Binance’s business is also under scrutiny after the spectacular FTX implosion. On Monday, Reuters reported, citing unidentified sources, that US prosecutors are considering closing a money laundering investigation into Binance by “filing criminal charges against individual executives, including founder Changpeng Zhao.”

The US Department of Justice did not immediately respond to a request for comment outside of US business hours.

Binance said in a statement to CNN that “as has been widely reported, regulators are conducting a comprehensive review of every crypto company.”

“This burgeoning industry has been growing rapidly, and Binance has demonstrated its commitment to security and compliance by investing heavily in our team and the tools and technology we use to detect and defend against illegal activity,” added a spokesperson.

Binance initially offered to bail out smaller competitor FTX before going out of business last month.

On Tuesday, Bankman-Fried was charged with eight felonies in the United States, including wire fraud and conspiracy. Separately, US market regulators accused Bankman-Fried of defrauding investors and customers.

Bankman-Fried, known as “SBF,” is a crypto celebrity who became an overnight outcast when his company suffered a liquidity crisis and filed for bankruptcy last month, leaving at least a million depositors without access to their funds.

— CNN’s Julia Horowitz, Matt Egan, and Allison Morrow contributed to this report.

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