Binance withdrawals jumped to $3 billion in 24 hours, Nansen says

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Investors withdrew as much as $3 billion from Binance on Tuesday, according to blockchain analytics firm Nansen, as a deluge of negative headlines about the cryptocurrency industry shook users of the world’s largest exchange.

Andrew Thurman, chief content officer for Nansen, told CNN that at its peak, Binance saw “up to $3 billion in net outflows” in a 24-hour period. A report on a ongoing investigation by the US Department of Justice in the exchange has been a factor in investor jitters, he said.

“At the same time, it was discovered that a large market maker, Jump, had withdrawn huge sums from Binance without any deposit over the past few weeks – ultimately appears to have caused concern among retail and institutional users,” said Thurman. “In short, it’s a lot of money coming out, and that scared some people off.”

Jump Crypto is part of the Jump Negotiating Groupa quantitative trading company.

Binance CEO Changpeng Zhao said the exchange had at one point seen “a few withdrawals” of around $1.1 billion. The company had seen worse days before, he added later.

“We are already seeing the money coming back,” he said. in a conversation on Twitter Spaces on Wednesday, calling the fund withdrawals “very normal market behavior.”

Zhao, known as “CZ,” said people were down in the crypto industry after FTX collapsed in November. Former Binance competitor founder Sam Bankman-Fried was arrested in the Bahamas this week after US prosecutors filed criminal charges against him.

“If you get hurt by one bank, you’ll think all other banks are bad,” Zhao said. “The point is, just because one bank is bad doesn’t mean all the other banks are bad.”

Concerns about the health of the industry have driven down the price of digital coins. Bitcoin was last trading below $18,000, down more than 60% year-to-date.

But Binance’s business is also under scrutiny after FTX’s dramatic implosion. On Monday, Reuters reported, citing unidentified sources, that US prosecutors are considering closing a money laundering investigation into Binance by “filing criminal charges against individual executives, including founder Changpeng Zhao.”

The US Department of Justice refused to comment.

Binance said in a statement to CNN that, “as has been widely reported, regulators are conducting a thorough review of every crypto company.”

“This nascent industry has grown rapidly and Binance has shown its commitment to security and compliance through significant investments in our team and in the tools and technology we use to detect and deter unauthorized activity. illegal,” a spokesperson added.

Binance had initially offered to help bail out smaller rival FTX, before pulling of last month’s agreement.

Tuesday, Bankman-Fried was charged in the United States on eight criminal charges, including wire fraud and conspiracy. Separately, US market regulators have also accused Bankman-Fried of defrauding investors and clients.

Known as “SBF,” Bankman-Fried is a crypto celeb who became an overnight pariah as his company suffered a liquidity crunch and filed for bankruptcy last month, leaving at least one million depositors unable to access their funds.

– CNN’s Julia Horowitz, Matt Egan and Allison Morrow contributed to this report.

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