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Some say it’s a well deserved reward for causing FTX to go down. Others contend that this is just a manifestation of the infection that has been slowly but irreversibly spreading through every possible crack in the crypto realm. Regardless of the reason behind the recent wave of turmoil, it is an undeniable fact that Binance appears to be in turmoil.
The largest 24 hour flow of BTC dollars From Binance Ever:
-39,637 bitcoins pic.twitter.com/nraXyco6Ai
– Dylan LeClair 🟠 (@DylanLeClair_) December 13, 2022
Over the past 24 hours, nearly 40,000 Bitcoins have been removed from Binance.
Biggest 24-hour inflow of stablecoins (BUSD + USDT + USDC) from Binance ever:
– 2.159 billion dollars
Total balance remaining: $20.483 billion pic.twitter.com/DuhCruEztF
– Dylan LeClair 🟠 (@DylanLeClair_) December 13, 2022
Moreover, the exchange just recorded the largest-ever outflow of stablecoins in a 24-hour window, surpassing $2 billion.
This sudden exodus of funds is now having a significant impact on Binance’s metric of Total Value Locked (TVL), which reached over $67 billion in 11 months.The tenth in November but now it’s only down to about $60 billion, which is a drop of about $7 billion — most of it happened in the last 48 hours.
December 13 isn’t over yet, however BNB dollars It saw a further drop to $257 at one point.
Now recording a 5.9% decrease in the last 24 hours, being the biggest loser in the top 10: https://t.co/UTXkCjAAZC
A 🧵 on the money flow. pic.twitter.com/1xeiA1Y1xm
– COIN360 (@COIN360com) December 13, 2022
So, what went wrong? First, Binance tasked Mazars with conducting an “audit” of its Bitcoin reserves. However, according to the auditor’s press release last week, the examination was very narrow in its breadth, focusing only on assets “in scope” and the use of “agreed procedures.” In what proved to be a critical point of contention, the auditor noted:
“A agreed-upon procedures engagement is not a review, review or other assurance engagement. A agreed-upon procedures engagement does not involve obtaining evidence for the purpose of the practitioner expressing an opinion or assurance conclusion in any form.”
Significantly, Binance’s Proof of Reserves certificate has been masked around the exchange’s liabilities, with CZ putting the proverbial gauntlet in the following words:
“Obligations are harder; we don’t owe loans to anyone; ask around.”
Additionally, as we reported yesterday, Reuters sent another wave of jitters this week when it reported that the US Department of Justice (DoJ) is currently divided over whether to formally file charges against Binance in a money laundering investigation that began in 2018, with some investigators pushing Now to move aggressively against key Binance executives, including co-founder and CEO, Changpeng Zhao (CZ). Furthermore, attorneys for the company have been meeting with Justice Department officials over the past few months to discuss a potential deal or out-of-court settlement.
Reuters got it wrong again.
Now they are attacking our amazing law enforcement team. A team we’re incredibly proud of – they’ve made crypto more secure for all of us.
Here’s the full statement we sent to the reporter and a blog post about our awesome law enforcement team.
– Binance (binance) December 12, 2022
Binance responded to the report by denying any “insight” into the inner workings of the Justice Department while highlighting the exchange’s contribution to supporting the law.
Check out Justin Sun (0x9f84) 33911530 BUSD dollars and 15,432,715 USDT From # Finance 9 hours ago.
Then transfer 33911530 BUSD dollars to the treasury of Paxos.
It exchanged 15,432,715 USDT dollars for 15,435,455 American dollar and transfer it to #Circle. pic.twitter.com/SCSPcjYVTC
– Lookonchain (lookonchain) December 13, 2022
Then, Tron founder Justin Sun sparked another wave of anxiety when he withdrew more than $33 million USD (BUSD) and more than 15 million Tether (USDT) from the exchange.
Binance USDC withdrawals are temporarily suspended, as the channel to switch from PAX/BUSD to USDC requires going through a New York bank in USD. Czechoslovakia said the situation will return when the banks open in a few hours. USDT and BUSD withdrawals are available and unaffected.
WuBlockchain December 13, 2022
The suspension of USDC withdrawals on Binance exacerbated the atmosphere of fear among investors.
I think this is part of the BUSD post on TRON. Cross-chain swaps. Not sure of the details. I don’t deal with it directly. https://t.co/DF32yAFxpI
– Czechoslovakia 🔶 Binance (cz_binance) December 13, 2022
Of course, as investors panicked, Sun quickly deposited $100 million into Binance, with Changpeng Zhao later explaining that Sun’s withdrawal was “part of the deployment of BUSD on TRON.”
Throughout this saga, Changpeng Zhao has continued to show confidence in Binance’s financial viability through Twitter:
“I think it’s a really good idea to ‘stress test withdrawals’ at every CEX on a regular basis.”
Despite CZ’s protests, BNB remains under pressure as the entire crypto world continues to hold its collective breath over the issue of Binance’s solvency.
Do you think CZ is now facing karma for his epic FTX arrogance? Let us know your thoughts in the comments section below.