CZ Binance Says To ‘Expect Tough Months Ahead’, Calls $6 Billion In Outflows A’Stress Test’

Ethereum World News
Ethereum World News December 14, 2022
Updated 2022/12/14 at 2:42 PM
3 Min Read

Summary:

  • Binance CEO Chanpgeng Zhao pointed to FTX’s collapse as a reason for increased scrutiny of the digital asset industry.
  • Zhao’s internal meme to Binance staff said the crypto exchange “will survive any crypto winter”.
  • Outflows from Binance crossed $6.1 billion in assets while inflows exceeded $6.5 billion in the same 24 hours, Nansen data showed.

According to Binance CEO Chanpgeng Zhao, crypto winter is far from over and bumpy days lay ahead for the digital asset industry following the collapse of FTX, a now-bankrupt crypto exchange founded by Sam Bankman-Fried.

Zhao who is known as CZ by crypto participants and mainstream media shared his thoughts in an internal memo seen by Bloomberg. CZ told colleagues and staff to expect amplified scrutiny on crypto companies. Zhao also expects that industry leaders like Binance will have tough questions to answer as the FTX debacle unfolds.

FTX Founder Sam Bankman-Fried was arrested in the Bahamas on December 13, a few before he was scheduled to testify before Congress. United State prosecutors affirmed that SBF was indeed arrested ahead of a formal indictment.

SBF was charged with eight counts including fraud on customers and investors, money laundering, and campaign finance violations. Bankman-Fried was arraigned before a judge and denied bail. His lawyers argued for a $250,000 bail bond.

Binance Prepared For ‘Stress Test’ Says CZ

CZ’s memo echoed previous rhetoric that Binance boasts liquidity to match withdrawal demands. The crypto exchange “will survive any crypto winter”, said Zhao to staff. Indeed, massive outflows from Binance highlighted mounting skepticism for centralized crypto exchanges and their reserves.

Nansen data showed withdrawals of over $6.1 billion in Bitcoin, Ether, and other digital assets from Binance in 24 hours. Data also showed $6.5 billion in inflows within the same period. CZ remained adamant that Binance customer assets are held 1:1.

CZ Binance Says To 'Expect Tough Months Ahead', Calls $6 Billion In Outflows A'Stress Test' 1
Nansen Data

Zhao used “FUD” and “stress test” to describe the spotlight on Binance following FTX’s crash, where top executives like SBF stand accused of stealing customer funds to finance debts and expenditures at Alameda.

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