Cryptocurrency giant Binance has faced massive headwinds on Monday after reports found net outflows of $831 million in a 24-hour period.
Blockchain research firm Nansen revealed the data, which follows a major regulatory crackdown on Binance USD (BUSD) issued by crypto trading platform Paxos.
Nansen blockchain data showed that users withdrew roughly $2.8 billion of their digital assets, surpassing $2 billion in deposits over the same period.
The withdrawals hit Binance after the New York Department of Financial Services slapped Paxos with an order to stop issuing the stablecoin. The third-largest in the world, BUSD accounts for 35 percent of Binance’s total trading volumes.
Binance CEO Comments on SEC-Paxos Lawsuit
In a series of tweets, Binance chief executive Changpeng Zhao (CZ) commented on the ongoing developments to his followers that “all funds are #SAFU.”
CZ stated that due to the regulatory crackdown, BUSD’s market capitalisation would decrease over time, adding Paxos would “continue to service the product, and manage redemptions.”
He added that he did not have any information on the SEC lawsuit against Paxos and that the latter had “assured us the funds are #SAFU, and fully covered by reserves in their banks.”
Zhao said: “I am not an expert on US laws. But personally […] ‘IF’ BUSD is ruled as a security by the courts, it will have profound impacts on how the crypto industry will develop [in] the jurisdictions where it is ruled as such. Binance will continue to support BUSD for the foreseeable future.
He stated that Binance did not “foresee users migrating to other stablecoins over time,” adding it would make product adjustments “accordingly.”
CZ concluded: “Given the ongoing regulatory uncertainty in certain markets, we will be reviewing other projects in those jurisdictions to ensure our users are insulated from any undue harm.”
