In the past 24 hours, cryptocurrency exchange Binance saw $1.14 billion in outflows. This is due to the increase in FUD (fear, uncertainty and doubt) within the crypto ecosystem.
According to Binance CEO Changpeng “CZ” Zhao, the exchange has seen this happen before, and he thinks “it’s a good idea to have ‘stress test withdrawals’ on every CEX [zentralisierten Börse] to be carried out by rotation”.
We saw some drawdowns today (net $1.14 billion). We have seen this before. On some days we have net withdrawals; some days we have net deposits. As usual for us.
I actually think it’s a good idea to “stress test drawdowns” on each CEX on a rotating basis.
— CZ Binance (@cz_binance) December 13, 2022
The bank run on Binance came a month after the run on FTX, leading to liquidity issues and the eventual collapse of FTX. This run on FTX, in turn, was sparked by CZ.
Despite the rise of FUD in the crypto community, many are optimistic that Binance will weather the storm and not suffer the same fate as FTX. Others say a collapse of Binance would destroy the entire crypto industry.
Bitcoin (BTC) millionaire Carl Runefelt tweeted: “If Binance crashes we are all screwed.”
If Binance crashes, we’re all screwed
— Carl of the Moon (@TheMoonCarl) December 13, 2022
Author and bitcoin enthusiast Layah Heilpern explained, “Do you realize that if Binance goes down, everything else will crumble? Yes, #Bitcoin will survive, but the whole crypto ecosystem and stablecoins will die.”
I don’t understand why people are applauding Binance’s collapse.
Do you realize that if Binance goes down, everything else will go down? yes #bitcoin will survive but the entire crypto ecosystem, including stablecoins, will die.
— Layah Heilpern (@LayahHeilpern) December 13, 2022
Twitter user Crypto Cognac said a collapse of Binance would not be good for the industry as it would “take the industry back to the Stone Age”.
If Binance goes down, it won’t do this space any good. Back to the stone age. Binance is my #1 exchange. I think Binance is doing well and this is a coordinated FUD campaign run by an entity that wants crypto to fail.
— CryptoCognac (@CognacCrypto) December 13, 2022
Timverse thinks Binance’s bankruptcy would “set the industry back years”. But crypto would survive because crypto “was here long before Binance existed and will be here after.”
Binance’s insolvency will definitely set the industry back a few years, I agree.
But will the crypto industry go away… no, I disagree.
Crypto Was Here Long Before Binance Was Here, And It Will Be Here After
— Timsverse (@Timsverse) December 13, 2022
Crypto analyst and government adviser Del Crxpto accused the crypto media of promoting the FUD surrounding Binance, saying, “The media is trying to cause a banking panic on Binance. Most recently it was said that Binance failed an exam. The fact is that time is the best examiner and Binance has passed the test of time.
The media tries to provoke a run on the banks @binance.
Over the past few weeks they have attempted to push several narratives in this regard, the latest being that @binance did not pass an audit.
The point is, time is audit #1 and @binance has proven the test of time.
— Del Crxpto (@DelCrxpto) December 13, 2022
On December 11, Cointelegraph reported that accounting and finance experts spotted red flags in Binance’s finances. Competitors called the crypto exchange’s proof of reserves “useless” because it did not include any liability.