According to statistics from blockchain intelligence company Nansen, Binance, the largest cryptocurrency exchange in the world by trading volume, has seen net outflows totaling $831 million over the last day. Investors are reportedly selling off more of their assets on the marketplace as a result of a regulatory crackdown on the Paxos-issued Binance USD (BUSD) stablecoin.
According to Nansen's blockchain data, customers have withdrawn more digital assets in the last 24 hours than they have deposited ($2.8 billion versus $2 billion).
The withdrawals happened after the New York Department of Financial Services ordered Paxos to stop issuing the $16 billion BUSD stablecoin on Monday. Additionally, the United States is preparing to take punitive action. Commission for Securities and Exchange (SEC). The third-largest stablecoin and source of 35% of the total trading activity on Binance is BUSD, which is distributed under the Binance name. According to a data dashboard by cryptocurrency investment product company 21Shares, Monday's action also represented the greatest, daily net outflows from Binance since November, topping outflows from December when the exchange's weak disclosure about its reserves scared traders.
Again, Binance reserves were tested.
The regulator's move is extremely damaging to the exchange because, according to Nansen statistics, BUSD, which has a market cap of $13.4 billion and is the second-largest asset in Binance's reserves after Tether's USDT, is present on the platform. This sum represents 22% of Binance's $60 billion in assets.
Despite the fact that blockchain analytics company Arkham Insight claims the sum is substantially greater, Nansen said that $3 billion in BNB, the native token of the Binance-run BNB Chain, represented over 5% of total assets on the exchange. BNB tokens were valued at $6.9 billion by Arkham on the platform.
The withdrawals tested Binance and its productive resources given the substantial portion of Binance-related assets on the site, Walter Teng, vice president of digital asset research at market research firm Fundstrat, wrote to CoinDesk in a Telegram chat. In the event that Binance doesn't retain customer deposits 1:1, Teng warned that they might be under withdrawal pressure. The only practical option is to redeem BUSD for U.S. dollars or another stablecoin and use that money to pay for customer withdrawals since on-chain liquidity for BUSD has already run out. Binance CEO Changpeng “CZ” Zhao assured investors in a tweet that customer monies are secure.
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