Binance: Changpeng Zhao warns that the coming months will be turbulent

Binance founder Changpeng Zhao (CZ) has reportedly told his staff to expect some rough months as the leading crypto-currency exchange records customer withdrawals. The warning comes as the crypto-currency industry faces challenges after high-profile bankruptcies and amid tightening regulations.

3 billion withdrawn from Binance at height of crisis, according to Nansen data.

Binance, the world’s largest crypto-currency exchange by trading volume, saw net outflows reaching $3 billion on Tuesday, Nov. 13, blockchain analytics firm Nansen revealed. The news comes as Changpeng Zhao, founder and CEO of Binance, sought to assure his team that the company is financially strong enough to survive the crypto winter.

Binance Netflow 7D ($) -3,660,311,347

8,783,380,428 – Outflow
5,123,069,081 – Inflow

Exchange Flows dashboard ⤵️https://t.co/CYrBQLryQ0 pic.twitter.com/vV6vcqoWKK

– Nansen 🧭 (@nansen_ai) December 13, 2022

The coin exchange platform has been dealing with the effects of a series of negative industry events, including the collapse of FTX, a major competitor in the forex market that filed for bankruptcy protection in November. FTX’s founder, Sam Bankman-Fried, was arrested in the Bahamas following charges brought against him in the United States.

A Reuters story about a U.S. Justice Department investigation into Binance also contributed to investor nervousness, according to Andrew Thurman, chief content officer for Nansen, who commented on the leak for CNN. Headlines that prosecutors are considering a money laundering investigation also came amid speculation about Binance’s reserves.

Binance currently holds $60.4B in their publicly disclosed addresses

$15.5B $BUSD
$12.3B $USDT
$9B $BTC
$6.2B $BNB
$6.1B $ETH
And others pic.twitter.com/sgr6RTIRYx

– Nansen 🧭 (@nansen_ai) December 14, 2022

CZ acknowledges withdrawals, seeks to minimize exits and calm colleagues.

In a tweet posted Tuesday, Changpeng Zhao acknowledged the outflow of funds while insisting that Binance has been in similar situations before. “Some days we have net withdrawals; some days we have net deposits. Business as usual for us“he said, suggesting that “it’s a good idea to ‘stress test the withdrawals’ on each CEX in turn.“

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. Business as usual for us.

I actually think it is a good idea to “stress test withdrawals” on each CEX on a rotating basis. 💪

1/2 https://t.co/uF9lLPDSyS

– CZ 🔶 Binance (@cz_binance) December 13, 2022

Meanwhile, the crypto executive also sought to mitigate concerns about the health of the exchange in a memo to his staff. According to a Bloomberg report citing the document, Changpeng Zhao stressed that the industry is going through “a historic moment“in which Binance is in a strong financial position and “will survive any cryptographic winter.“

“Although we expect the next few months to be bumpy, we will get through this difficult time – and we will be stronger for having gotten through it“, CZ told the Binance team. Referring to the latest developments in the space, he added that the recent collapse of FTX has led to “A lot of additional scrutiny and tough questions” for his exchange.