Binance Sees Billions Withdrawn. Will It Be the Next to Fall?

By Spencer Hulse Spencer Hulse has been verified by Muck Rack's editorial team
Published on December 20, 2022

Binance is facing intense scrutiny in the wake of FTX’s fall, which sent shockwaves through the industry. People are worried about the financial health of the exchange, and for good reason. Binance’s native token, BNB, has dropped in value tremendously in recent days, and withdrawal demands have been massive.

There is significant worry over Binance’s holdings of customer funds. FTX made people cautious about whether exchanges could pay up if there were a lot of withdrawals in a short period. It put pressure on crypto firms to show that they could, and in response, Binance decided to get a proof of reserves report.

The exchange brought in accounting firm Mazars, which is expected to reassure customers that their funds were right where they were supposed to be. However, many have placed doubt on the report, saying it presented some red flags and did not sufficiently dig into the financial controls.

  • The report showed that the exchange’s Bitcoin liabilities were greater than assets by $245 million.
  • Bloomberg also pointed out that its stablecoin BUSD and native token BNB made up around half of its $75 billion reserves.

Mazars then suspended work with crypto clients. The accounting firm is no longer doing proof of reserves audits for crypto clients. The firm stated that it was concerned about how the reports were “understood by the public.” The decision will impact multiple crypto firms, including Binance,, and KuCoin.

There is a DOJ investigation related to illegal payments. The investigation began in 2018, and some prosecutors now believe there is enough evidence to charge executives at Binance, including founder and CEO Changpeng “CZ” Zhao, on charges involving money laundering and criminal sanctions violations.

  • The split between prosecutors has currently delayed the conclusion of the investigation.
  • The crypto firm commented that it had no insight into the “inner workings of the US Justice Department.”
  • There are claims that Binance has processed in excess of $10 billion in illegal payments in 2022.

Billions in assets have been pulled out at a rapid pace. A week ago, more than $3 billion in funds was pulled within the span of a day, according to Nansen. The situation forced Binance to halt withdrawals of the USDC stablecoin while it boosted its holdings.

  • Withdrawals and fluctuations in the market have seen the overall holdings of the crypto giant decrease from nearly $70 billion to around $55 billion in a little over a month.

CZ’s downplaying of the situation has furthered concerns. While it might be his way of keeping people calm, he continues to attempt to ease customers without providing any specific and verifiable evidence. He has even referred to concerns as FUD, the spread of baseless fear, uncertainty, and doubt.

  • He has welcomed the flood of withdrawals, calling it “business as usual” and treating it as a “stress test” that helped Binance build credibility.
  • Behind closed doors, he has told Binance employees that there are some tough times ahead, saying they need to weather the storm before things can get better.

Will it be the next to fall? It is still unclear if things will pile up and topple the crypto giant, but things are not fine. There are a lot of “ifs” in the air, and any one of them could cause major problems for the exchange.

By Spencer Hulse Spencer Hulse has been verified by Muck Rack's editorial team

Spencer Hulse is the Editorial Director at Grit Daily. He is responsible for overseeing other editors and writers, day-to-day operations, and covering breaking news.

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