Binance Witnesses Huge Outflows Over PoR Concerns

On Monday, Binance faced a flood of withdrawals due to worries over their proof of reserve report. According to blockchain intelligence company Nansen, 24 hour net outflows surpassed $902 million. 

Withdrawals soared after a series of negative news about Binance, and as investors became more concerned about controlled exchanges. 

The collapse of rival exchange FTX has pushed other exchanges to verify they are protecting consumers’ assets. Blockchain evidence suggests Jump Trading and Wintermute moved big sums from Binance in the last week.

Mazars auditing firm said the exchange’s bitcoin reserves are overcollateralized. Recent reports and industry experts criticized the document’s narrow scope, and Reuters reported Monday that U.S. prosecutors are considering money laundering charges against Binance and its executives, including CEO Changpeng Zhao.

However, Zhao asked his Twitter followers to “ignore the FUD” in a tweet.

Arkham Intelligence reported Binance’s outflow was the greatest since Nov. 13, two days after FTX declared bankruptcy. An Arkham analyst said the withdrawal “doesn’t seem notably anomalous” given the exchange’s $64 billion in assets. 

Arkham’s blockchain data shows that Jump redeemed $30 million in Binance USD (BUSD) from Paxos.

Nansen Data Shows Increased Binance Outflow

Nansen analyst Andrew Thurman tweeted that Jump Trading is the biggest Binance withdrawal. Data shows that Jump crypto wallets withdrew $146 million from the exchange in the past week. Jump’s net withdrawals include $102 million in Paxos’ Binance USD (BUSD), $14 million in Tether’s USDT, and $10 million in ether (ETH).

Another major cryptocurrency market maker, Wintermute, withdrew $8.5 million worth of wrapped bitcoin (wBTC) and $5.5 million worth of Circle’s USDC stablecoin.

Binance canceled a trader’s account on December 9 after a user complained about a robbery. The exchange doesn’t want “unreasonable” clients, says the CEO. An FTX user complained in October that hackers entered the account’s API and removed digital assets worth over $1 million.