Binance Sees A Slight Increase In Withdrawals

Changpeng Zhao, the chief executive of Binance, said that there had only been a slight increase in withdrawals on their platform.

Even though digital prices had plunged after the FTX collapse, the crypto exchange was operating as per routine.

On Monday, Zhao stated that the list of ‘cold’ crypto wallets that they had published after the FTX bankruptcy filing had not seen any significant withdrawals take place.

Everything is normal

The CEO said that there may have been a slight uptick in withdrawals, but he was quick to add that this is the norm when the crypto market is on a decline.

He stated that every time there is a fall in prices, the withdrawals go up and all of this is quite normal. Bitcoin had been trading close to the $20,000 level for months.

But, the world’s first crypto saw volatility make a comeback in the previous week, as the crypto market was in turmoil due to the news of a liquidity crunch on the FTX crypto exchange.

On Monday, Bitcoin had dropped to a price of $16,600 and had been close to the same value almost 24 hours earlier.

According to Zhao, they had not seen 80% of the funds from cold wallets withdrawn, or 50% withdrawals from their platform, as some others had experienced. He said that it was business as usual for them.

Crypto contagion

On Friday, FTX filed for Chapter 11 bankruptcy in Delaware after it found itself in the midst of a liquidity crisis because investors kicked off a selloff due to concerns about its financial health.

Binance had entered into a non-binding agreement to purchase the embattled exchange but backed out after doing some diligence.

The troubles for FTX had actually begun when a report disclosed the close ties between FTX and its sister entity, Alameda Research.

Next, Binance’s CEO tweeted that the company would sell its FTT token holdings, which saw the token’s price plunge and withdrawals from FTX surge.

The turmoil

Zhao said on Monday that he had not intended to cause so much ‘turmoil’ in the market and added that he had been blamed by some people.

He stated that he did not know that there would be so much carnage because of his tweet. He also talked about other companies facing problems after FTX.

He admitted that there would undoubtedly be some cascading effects, but he said that the number of failures and the drop in prices of cryptocurrencies would eventually reduce.

Zhao asserted that it is usually the big fish that goes down first and the effects are smaller every time. There has been a huge crisis in the crypto market this year.

Most of it is because businesses owed money to others and their reserves were tied in tokens that did not have liquidity.

The Terra ecosystem also collapsed back in May, wiping out around $60 billion from the crypto market because the technical model of the two main tokens was questioned.

This resulted in multiple failures in the market, including Three Arrows Capital (3AC), Celsius Network, and Voyager Digital.