Less than 2 months after the FTX ‘catastrophe’, Binance lost 24% of its net worth, the withdrawal amount reached 12 billion USD

According to Forbes, the cash outflow from cryptocurrency exchange Binance is much more severe than what cryptocurrency billionaire Changpeng Zhao (CZ) predicted by the end of 2022.

In the wake of the collapse of rival FTX, investors have massively withdrawn from the world’s largest cryptocurrency exchange. Despite the reassurance and assurance from CEO Changpeng Zhao, the cash flow out of the exchange continued to increase. According to data from Defillama, customers had a net withdrawal of $360 million on January 6.

Crypto data company Nansen said that in the first week of December, Binance lost $3 billion, or about 4% of total company assets at the time. However, according to Forbes, Binance actually lost 15% of its assets at the time, meaning that $12 billion of Binance’s reserves evaporated in less than two months.

The confidence of investors is most clearly shown through the price lines of Binance Coin (BNB) and Binance USD (BUSD), two separate tokens of Binance exchange when the FTX “catastrophe” occurred and Binance’s transparency was also compromised. suspect. BNB has dropped 29% in the past 2 months. Forbes estimates there are about 29 million BNB remaining on Binance, 51% less than on Nov. 10, while the number of BUSD stablecoins at the company has dropped 40%.

Binance exchange’s assets are ranked by leading crypto data platforms. Source: Forbes

In December, after FTX went bankrupt, customers also started to “escape” from Binance and the amount of withdrawals kept increasing. At the same time, the company also received a lot of suspicion when the reports repeatedly pointed to holes and suspicious points in the way the exchange operates. From impeaching Binance for violating anti-money laundering laws, evading sanctions to stopping USDC withdrawals, not having enough reserves for users to withdraw, to being refused to cooperate by auditing firms…

The Binance CEO posted on his personal Twitter page affirming that the exchange has no liquidity issues and will continue to promote on-chain asset reserve verification, facilitating queries and verify the storage of user assets. From December 12-14, up to 6 billion USD was withdrawn from Binance, but the crypto billionaire still thinks this is a simple “stress-test”.

Assets of the 10 largest exchanges as of January 4, 2023. Source: Forbes

Besides, Forbes also pointed out the difference in Binance’s reserve statistics across analytical platforms. On CoinMarketCap, Binance had 57 million BNB on Jan. 4. Meanwhile, on Nansen, DefiLlama and Arkham there are only between 22-40 million BNB. Independent analysis by Forbes via Etherscan found only 16 million BNB on the exchange.

Disparities were also found in Binance’s Bitcoin (BTC) holdings, which ranged from $4.8 billion (CoinMarkeCap) to $9.6 billion (CER.LIVE), and more than double the amount held. displayed by Glassnode. This may be due to faulty queries from some data companies. However, the difference in data between analytics platforms, with vulnerabilities amounting to tens of billions of dollars, also raises concerns about difficulties in data tracing.

The supply of stablecoin BUSD also plummeted by nearly $6 billion after a string of crashes. Up to $5.5 billion was exchanged from BUSD by users in just one month, causing the stablecoin capitalization to fall from $22 billion to about $16 billion.

Forbes thinks that Binance is gradually losing its position in the market. While net worth is down 24% since November, investors in coins like MATIC, APE and GALA have reduced their assets by 40-50% on the exchange.

According to Binance, the exchange’s business model is very simple, profits mainly come from transaction fees. Binance does not “embezzle” user funds for any transactions or investments, does not owe anyone nor is on the list of creditors of any institution that has just gone bankrupt. Binance’s financial status is now very healthy and there is enough reserve capital to handle day-to-day operations, even if all users have access to withdrawals.

Reference: Forbes