CZ Dismisses 'Slight' Increase in Binance BTC Withdrawals After FTX Crash
As the FTX crisis draws on, competitor and leading global exchange platform Binance recorded a jump in client withdrawals. Users have pulled out assets such as Bitcoin, Ethereum, and other stablecoins from the firm as tensions soar throughout the market. CZ however dismissed any worries, describing the increased withdrawals as only ‘slight’ and ‘normal’.
Binance Users Withdraw BTC, ETH, and Others
On-chain data platform CryptoQuant reports BTC withdrawals on Binance totaling 81,712 tokens. This amounts to roughly $1.35 billion at current prices. In just under a week, clients have taken out what constitutes over 15% of the platform’s entire Bitcoin volume, about 500k BTC.
Users also withdrew about $155 million worth of Ethereum tokens, approximately 125,026 units of the digital asset. $1.14 billion in stablecoins also exited the exchange platform within the same time frame.
Notably, the large exit volumes are not isolated to Binance. Indeed, Coinbase, Gemini, and Kraken are some of the many platforms that are experiencing a similar phenomenon. Per Coinglass data, exchanges throughout the world have seen users withdraw almost 200,000 Bitcoin tokens in the past week. As such, swap platforms now hold a total of about 1.88M BTC.
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FTX Collapse Pushes Customers to Take Assets Off Exchanges
The downfall of crypto exchange FTX global, formerly the world’s third largest by trading volume, prompted the events of the last 7 days. After a report revealed that sister company Alameda Research held massive quantities of the firm’s native FTT token, it began to decline. Customers began pulling out their assets leading FTX straight into a major liquidity crisis.
In just a few days, FTX’s holdings of the premier cryptocurrency dropped from 20,000 tokens to one BTC. Binance initially sought to distance itself from the collapse by dumping its FTT holdings. Later on, however, CEO CZ attempted to rescue FTX with plans for an acquisition the platform eventually canceled in under one day.
FTX subsequently froze withdrawals and filed for Chapter 11 bankruptcy.
Increase in Withdrawals is Normal – Changpeng Zhao
Earlier today in a Twitter space, Changpeng Zhao commented on the withdrawals. CZ called for calm within the crypto community. According to the Binance CEO, a “slight” rise in the rate of withdrawals typically follows a decline in crypto prices.
We do see a slight increase in withdrawals but whenever prices drop, we see an uptick in withdrawals, that is quite normal.”
Indeed, the FTX fallout has seen the industry’s leading asset devalue rapidly dropping to new lows under $17k. However, the king crypto saw minimal recovery after CZ revealed his company’s plans to set up an industry recovery group.
To reduce further cascading negative effects of FTX, Binance is forming an industry recovery fund, to help projects who are otherwise strong, but in a liquidity crisis. More details to come soon. In the meantime, please contact Binance Labs if you think you qualify. 1/2
— CZ Binance (@cz_binance) November 14, 2022
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BUY NOWCZ’s comments are also notably similar to Crypto.com remarks from Crypto.com CEO Kris Marszalek. Marszalek insists the slight increase in withdrawals is expected and is no cause for alarm.
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