Investors Suddenly Withdrew $3 Billion From Binance In Just A Day, Will The World Largest Cryptocurrency Exchange Crash Along With FTX?

The exchange was forced to temporarily suspend USD Coin withdrawals while increasing its holdings for the stablecoin.

Nansen reported that just over a month ago, the crypto giant held $69.5 billion in digital assets in publicly detailed “wallets.” Meanwhile, the above amount is currently 54.7 billion USD due to the influence of the last withdrawal and the price fluctuations of cryptocurrencies.

US Department of Justice investigates Binance for money laundering

One issue that "adds fuel to the fire" is the news that the DOJ is investigating Binance for compliance with the company's financial crime rules.

Reuters reports that prosecutors are considering whether to bring criminal charges against founder Changpeng Zhao and guest executives. Those charges would include conspiracy to launder money, unlicensed money transfers and criminal sanctions violations.

Reuters estimates that Binance processed more than $10 billion in illegal transactions by 2022 and says it is trying to evade regulators - something the exchange is protesting against.

CZ is not confused and insists that they are still operating normally

CZ made every effort to assuage customers' concerns about Binance's liquidity issues. He opposed what is known as "FUD" - the spreading act of fear, uncertainty and unfounded suspicion.

CZ told CNBC on Thursday: “People can withdraw 100% of their money on Binance. We never had any problems. Crypto businesses have to hold users' assets and that's what we do."

Earlier last week, CZ said that the massive withdrawal of investors is still a normal activity of the exchange. And after Binance lifted the requirement to freeze withdrawals with USDC, he said it was a “pressure test” to build credibility for the exchange’s resilience.

CZ still warns about the "bumpy road" ahead

Although the issues causing concern are no longer intense, uncertainties still exist. CZ told employees that the FTX issue raised “a lot of conundrums and triggered increased scrutiny” of Binance.

“While we anticipate some difficulties in the next few months, we will get through this challenging period,” he said. We will be stronger as we pass.”