The world’s largest cryptocurrency exchange, Binance, is seeing a large amount of assets leave its platform. This comes in the wake of the collapse of rival FTX, and investors have become increasingly wary of their crypto investments. CEO Changpeng Zhao has assured customers that the situation has stabilized, but recent data from Defillama shows that outflows are accelerating, with a net of $360 million withdrawn on Friday. This is a concerning development for Binance, and they will be hoping to turn the situation around quickly.
The lack of trust in investors is becoming more and more evident by the performance of the two tokens that carry Binance’s name: Binance Coin (BNB) and Binance USD (BUSD). According to Forbes, BNB has lost a staggering 29% of its value in the past two months, leading to a 51% decrease in the tokens held by the exchange since November 10. Similarly, the number of BUSD stablecoins at the exchange has declined by a whopping 40%. This trust deficit is also reflected in the decreased assets of tokens like matic, ape, and gala, which have seen investors pare their assets at Binance by 40-50%. All of this points to the fact that investors are losing trust in Binance, which could have a serious impact on the exchange’s future.
Binance, the largest crypto exchange by volume, has been greatly affected by the continuous decline in digital assets over the past year. Its own BNB token has seen a 37% dip from 12 months ago, and the decision to stop charging fees for spot bitcoin trading has cost the exchange around $3 billion according to Forbes. Overall, cryptocurrencies as a whole have suffered a 56% drop in value from CoinMarketCap data, amounting to $848.7 billion. CZ himself has contributed to the downfall of FTX in November when he announced his plans to sell their FTX tokens, then worth $580 million, citing “recent revelations”. He followed this up with a rescue offer that was soon retracted due to the severity of the situation.