Binance CEO, CZ assures deposits are coming back, says situations now stable

Changpeng Zhao said on Wednesday, December 14, 2022, that the situation at Binance is now stable in order to douse investors’ fears after the firm was forced to halt withdrawals.

CZ stated that about $1.4 billion of net withdrawals happened on Tuesday, December 13, 2022, but said on Twitter that it was not the highest withdrawals the firm has processed, stating that deposits are coming back.

Zhao’s comments came after the world’s largest crypto-exchange platform halted withdrawals of USDC stablecoin temporarily on Tuesday and said it was conducting a crypto swap.

He said Binance had witnessed a spike in USDC pullouts. The halt in withdrawals was a result of some currency swaps which needed rerouting through an unspecified bank in New York that was not open.

The company resumed withdrawals after an eight-hour downtime.

Investors were fidgety over the development, especially after FTX collapse and subsequent arrest of its founder, Sam Bankman-fried now facing fraud charges in the Bahamas.

Nansen, a blockchain analytics company said Binance witnessed more than $3 billion in withdrawals in the last seven days but stated that the situation is not the same as FTX.

CZ has fronted a sense of strength at Binance internally.

He stated that the months ahead would be a bit bumpy but said that ‘we would get past this challenging period.’

CNBC reported that traders asked the platform to be more transparent with Binance’s business.

In November, the company issued a proof of reserve, claiming to have a reserve ratio of 101 per cent which means it has enough assets to cover customer deposits.

Zhao stated on Twitter Space that Binance holds user asset reserves of one-to-one. He also said that firm is going to issue another batch of proof of reserve in the coming weeks.