This Tuesday, Binance customers rushed to recover the dollars they had on the platform. The 'cryptocurrency' company received overwhelming requests to withdraw Stablecoin USD Coin (USDC), the digital currency pegged to the dollar and the fifth largest capitalized. In particular, the balance between all inflows and outflows of this token leaves the company with a “hole” of $286.7 million. This represents 24.5% of the total Binance reserves received in “stablecoins,” according to DefiLlama.
Platform Changpeng Zhao (CZ, also known as the founder of the exchange on Monday) had $1.17 billion in its portfolio. That figure fell a day later to $885.9 million. After that, Binance had to discontinue withdrawals of that token, as explained on Twitter. , claiming that they were carrying out an operation on their platform that prevents them from processing all applications that will resume when the bank opens,” CZ clarified.
With the measure of blocking exits, the company managed to alleviate the situation since it does not allow customers to withdraw their money, but allows others to place it. So, before the 'corralito', the flow between inflows and withdrawals was negative, but when it is enacted, the flow of money can only be positive. This has taken Binance's stablecoin reserves to over 1 trillion, according to data compiled on DefiLlama.
In any case, this movement shows that a significant number of investors were in a hurry to recover part of their investment. Not only USDC, which controlled 24% of its reserves before the shutdown, but also exchanges that only held $ 3 billion worth of tokens overnight. According to the same data, Binance now holds 61.1 billion crypto assets.
But the important thing is that Binance had to suspend USD Coin withdrawals. This is a “stablecoin” and its price is pegged to the US currency, so it always revolves around one dollar. Stablecoins allow investors to avoid the volatility of the “crypto” market, since the price of each token is always practically the same (1 USDC = 1 USD) and only varies in tenths and hundredths. Therefore, clients who purchase USDC have had no recorded losses on bitcoin or ether and can liquidate the position, recovering the same, or almost the same, amount that they deposited in dollars.
This stablecoin leak is unlikely to hurt Binance's liquidity as it only represents a fraction of Binance's total cryptocurrency holdings. According to CoinMarketCap, 27.2 % of its reserves are native token (BNB), followed by 26 % of its stablecoin assets (BUSD), and with 16.8 % pegged (USDT) in the wallet, the third capitalization of “cryptocurrency” and the largest. stable currency. But the stock market appears to be gathering suspicion after the collapse of its rival FTX.
The uncertainty about Binance, the main platform by assets, has worsened in recent hours, which could also explain the nervousness of investors. Yesterday, Reuters exclusively reported that the US Department of Justice has been investigating the company since 2018 and that the review revealed strong evidence that crimes were committed. No action has been taken as the people handling the case disagree about whether to start a jury trial or end multiple lawsuits. Founder CZ will also handle criminal cases.
He would not be the only “crypto businessman” with alleged crimes under his belt, as Sam Bankman-Fried was arrested in the Bahamas. The FTX founder faces civil and criminal proceedings from the US tax authorities, the stock exchange regulator (SEC) and the options and futures market regulator (CFTC). The arrest of the SBF also helps with the crisis of confidence in the cryptocurrency market. In fact, calls for excessive cash outs led to stock market crashes and crashes that then attracted others.