Binance, the biggest cryptocurrency exchange in the world saw $1.9 billion worth of withdrawals in only one day. Regulators are closely monitoring how cryptocurrency exchanges like Binance and the now-bankrupt erstwhile rival FTX handle customer deposits.
The U.S. Securities and Exchange Commission charged FTX founder Sam Bankman-Fried on Tuesday with defrauding investors. According to Nansen data, the $1.9 billion in withdrawals of Ethereum-based tokens represents the highest 24-hour outflow of assets since June 13 and is responsible for most of the money taken out during the previous seven days.
According to Binance CEO Changpeng Zhao, the exchange has once witnessed “some withdrawals” totaling over $1.1 billion. He then stated that the business had experienced worse days before. He tweeted, “We’re seeing the money flowing back already. We saw some withdrawals today (net $1.14b ish). We have seen this before. Some days we have net withdrawals; some days we have net deposits.”
Zhao, also known as “CZ,” claimed that after FTX’s demise in November, people had lost faith in the cryptocurrency industry. Sam Bankman-Fried, the founder of Binance’s former rival, was arrested this week in the Bahamas after being charged with a crime in the US. Early in November, FTX collapsed, sparking a surge of public calls for more regulations of the cryptocurrency sector.
Sam Bankman-Fried, the exchange’s founder, had bragged that it was the “most regulated,” yet he had established it in the Bahamas, where regulation was lax and had covertly exploited customer deposits. Attorneys for FTX said during a bankruptcy hearing that Bankman-Fried operated the exchange as a “personal fiefdom.” According to Bankman-Fried, he didn’t intentionally do anything improper.
The cost of digital coins has been falling due to worries about the industry’s state. With a year-to-date loss of more than 60%, the price of bitcoin was last going below $18,000.
However, following FTX’s stunning collapse, Binance’s company is also being scrutinized. According to unnamed sources cited by Reuters on Monday, US authorities were considering concluding its probe into Binance’s money laundering by “filing criminal charges against specific officials, including founder Changpeng Zhao.”
Bankman-Fried was charged with eight crimes, including conspiracy and wire fraud, on Tuesday in the US. US markets watchdogs have also accused Bankman-Fried of scamming investors and clients separately.
Bankman-Fried, often known as “SBF,” is a well-known figure in the cryptocurrency world who was instantly shunned after his business experienced a liquidity difficulty and declared bankruptcy last month, preventing at least one million depositors from having access to their money.
Splits among US Department of Justice officials are delaying the resolution of a protracted criminal investigation into Binance, the largest cryptocurrency exchange in the world, as per Reuters. The inquiry was launched in 2018 and is concentrated on Binance’s compliance with American anti-money laundering rules and sanctions.
As per Reuters several of the at least six federal prosecutors working the case feel that the information previously acquired supports taking serious action against the crypto exchange and charging certain officials, including the founder Changpeng Zhao, with crimes. The sources claimed that others have urged for taking the time to consider further evidence.
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