BNB price dips as Binance withdrawals take centre stage amid FUD

A lot is going around about Binance payout problems, dwindling reserves, sanctions violations, and investigation by the US Attorney’s office.
As a result withdrawals from the exchange have surged in the past 24 hours.
Binance had earlier today temporarily halted withdrawals of USDC on ETH and BNB chains.

BNB price has taken a hit amid the ongoing online discussions about a number of issues with the largest cryptocurrency exchange Binance. At press time the BNB coin was trading at $268.55, down 5.30% over the past 24 hours.

Last week, Binance released a report by an auditing firm called Mazars that showed that its bitcoin (BTC) reserves were overcollateralized. The report received sharp criticism from industry experts who argued that the document lacked clarity.

Then on Monday as reported in our earlier news, Reuters reported that the US prosecutors were mulling criminal charges for possible money laundering against Binance and its executives including Changpeng Zhao.

Although the events seem to be negatively affecting the crypto exchange and its native token, BNB, the CEO, Changpeng Zhao, in a tweet has urged his followers to “ignore the FUD.”

Increased Binance withdrawals

Binance saw a wave of withdrawals on Monday and it seems the trend has carried on to today. According to blockchain intelligence platform Nansen, the net worth of the difference between the crypto assets arriving and leaving the exchange has hit $902 million over the past 24 hours. This is far more than the withdrawals of all the other centralized exchanges in the same time span. To put it into context, Binance withdrawals are almost nine times greater than those from the second-largest exchange outflow.

According to data from blockchain data platform Arkham Intelligence, the current crypto outflow from Binance is the highest that the exchange has seen since November 13, which was days after FTX filed for bankruptcy protection.

An analyst from Arkham however noted that the outflows from Binance do not seem notably anomalous since Binance supposedly has about $64 billion worth of crypto assets in its reserves.

Out of the cryptocurrencies that users seem to be massively withdrawing from Binance is the USDC, which caused Binance to temporarily halt USDC withdrawals earlier today. In a tweet, Binance said that it had paused the withdrawals since it was “conducting a token swap involving $USDC. As a result, $USDC withdrawals are temporarily paused.”

The exchange also went ahead to assure its customers:

“$USDT & #BUSD withdrawals are available and unaffected. $USDC withdrawals will reopen once the token swap is completed.”

Binance CEO Changpeng Zhao also tweeted saying:

“On USDC, we have seen an increase in withdrawals. However, the channel to swap from PAX/BUSD to USDC requires going through a bank in NY in USD. The banks are not open for another few hours. We expect the situation will be restored when the banks open.”