Tuesday, 14 February 2023

Binance processes $1B withdrawals amid regulatory scrutiny on BUSD (Cryptoslate)

by Berkeley Lovelace

Binance users are withdrawing their crypto assets following the recent regulatory scrutiny of one of the exchange’s products.

In the last 24 hours, the exchange saw outflows of $621 million, according to a Wu Blockchain report. The outflows had dropped to $460 million as of press time, according to DeFillama data.

Binance recorded $916 million in outflows in Ethereum-based (ETH) tokens on Feb. 13 — its highest daily withdrawal since Nov. 24, 2022, according to dune analytics data.

Meanwhile, the flood of these withdrawals pales compared to those recorded in November 2022 when FTX collapsed. At the time,  Binance processed over $6 billion in withdrawals over seven days.

Over $300M BUSD redeemed

Binance USD (BUSD) issuer Paxos burnt $342 million worth of the stablecoin during the previous 24 hours, according to Etherscan data.

BUSD tokens are burned when users convert their holdings into fiat.

On Feb. 13, the stablecoin issuer was ordered by the  New York Department of Financial Services to stop other mints of the stablecoin because it violated its “obligation to conduct tailored, periodic risk assessments and due diligence refreshes of Binance.”

The regulatory crackdown saw the stablecoin briefly trade at a discount against its rival Tether (USDT), according to Kaiko data.

Meanwhile, blockchain analytical firm Nansen reported that institutional investors like Jump Crypto holding the stablecoin were withdrawing their holdings from exchanges.

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