Terrified investors appear to be concerned as U.S. authorities crack down on Binance USD (BUSD) issuer Paxos, pulling funds from Binance. In the past 24 hours alone, Binance saw net outflows of $831 million, according to blockchain analytics firm Nansen. Meanwhile, Binance Coin (BNB) was also hit by the negative news, falling 6.9% in the past 24 hours to trade at $291.01 at press time.
Binance users have withdrawn about $2.8 billion in cryptocurrency and deposited about $2 billion in cryptocurrency over the past 24 hours, according to Nansen’s blockchain data.
On January 13, the “Wall Street Journal” shocked the market and published a report that the US Securities and Exchange Commission (SEC) was tracking down the Binance-branded stablecoin BUSD. Soon after news came out, the New York State Department of Financial Services had instructed Issuer Paxos stopped minting new BUSD.
Although Binance CEO Changpeng Zhao (CZ) tried to dispel concerns from all walks of life, saying that BUSD is issued and redeemed by Paxos, and emphasizing that user assets are safe and fully backed by reserves, a series of negative news has prompted investors to take action , Propose funds to avoid risks.
BUSD, a USD stablecoin issued under the Binance brand, is currently the third largest stablecoin accounting for 35% of all trading volume on Binance.
According to Nansen data, there are about $13.4 billion in BUSD on the Binance platform, accounting for about 22% of Binance’s $60 billion in assets, and BNB also accounts for almost 5% of all Binance’s assets.
Walter Teng, vice president of digital asset research at market analysis company Fundstrat, commented that given the large number of assets related to Binance on the platform, the current “gold withdrawal wave” is a severe test for Binance and its reserve assets. He said:
Assuming that Binance does not hold customer deposits at a ratio of 1:1, they may face withdrawal pressure. BUSD’s on-chain liquidity has begun to dry up. Converting BUSD into USD or other stable coins to meet customer withdrawal needs is The only viable option.
Further reading 👉🏻 Binance’s “outflow of 3.6 billion US dollars in a single week” is not afraid! CZ: “Withdrawal stress test” as a tonic