The recent Binance FUD led to over $1.3 million in withdrawals in 24 hours. However, the exchange assures users that it is not in debt.
While Binance has been on a rocky boat for the past few days, the largest crypto exchange globally wants to reassure its users of better days. According to reports from December 13, there was a Binance FUD (Fear, Uncertainty, and Doubt) going around. This situation followed the US financial watchdogs’ lack of stand on whether to charge the exchange.
The US Department of Justice was investigating money laundering and the exchange violating criminal sanctions. However, the DOJ lacks the proper evidence to tie the exchange to these speculations.
Despite this slowdown in any charges for the Binance exchange, fear spread through the crypto community, leading to increased withdrawals from the platform. All in all, the exchange’s founder Changpeng Zhao assured that the test is suitable for Binance’s future. In a way, it increases people’s trust in the exchange as it maintains its high liquidity.
CZ also mentioned that the high rate of withdrawals recorded on December 13 is not a new hurdle for Binance. If anything, the 24-hour total of approximately $1.4 billion was not among the top sum withdrawals from the exchange in a day. Also, the deposits are currently overpowering the withdrawals caused by the FUD.
Binance increases trust with its customers
Recently, Binance adopted Proof of Reserves to increase customers’ trust in its services. This decision resulted from the FTX scandal that continues to unfold even today. Notably, the Binance FUD is no surprise considering the arrest of former FTX CEO Sam Bankman-Fried, following defrauding charges.
While the released report is only some-conclusive, Binance wishes to conduct a comprehensive audit of all its wallets to create the required Merkle tree. Meanwhile, it released information on wallets with a sum of over $60 million. The exchange maintained that it tops up balances in its hot wallets to have enough daily withdrawals.
Furthermore, there is still a 1:1 ratio of user assets and current reserves. As such, the speculation of the company’s bankruptcy is far-fetched. Binance also assures its users of over $60 billion in on-chain reserves. This amount will be verifiable with Mazars’ assistance once it completes the Proof of Reserves Merkle tree.
Managing through hard times
Binance released an announcement to its staff concerning the current shaky times crypto is experiencing. The exchange believes that crypto will recover, despite experiencing hardships over the months. Moreover, it believes that the FTX mold will stop spreading to other exchanges as long as they maintain their honesty.
Currently, inflows into Binance are stabilizing as the FUD proved false. According to CZ, FUDs are annoying and can mislead users. All the same, they are a way of cleaning the industry to remain with trustworthy platforms that care for their customers’ needs.
