The native token of crypto exchange Binance Holdings Ltd. snapped a prolonged slide that was sparked in part by concerns about outflows from the world’s largest digital-asset trading platform.
(Bloomberg) — The native token of crypto exchange Binance Holdings Ltd. snapped a prolonged slide that was sparked in part by concerns about outflows from the world’s largest digital-asset trading platform.
Binance Coin — or BNB — is up about 4% in the past two days, ending a seven-day losing streak through Saturday that was the longest since October. Bitcoin and a gauge of the top 100 tokens treaded water over Sunday and Monday.
BNB could be viewed as an arbiter of sentiment toward Binance. The platform saw $6 billion of net withdrawals over three days last week amid a general lack of confidence in crypto following the bankruptcy of rival exchange FTX and allegations of fraud against the latter’s founder Sam Bankman-Fried.
A Binance spokesperson declined to comment on BNB price movements while reiterating that by fulfilling recent withdrawals, the exchange passed a stress test that should offer “extraordinary comfort” that funds are secure.
There was “a lot of FUD about Binance last week,” said Cici Lu, chief executive officer of crypto consultancy Venn Link Partners, using an acronym for fear, uncertainty and doubt. “The market is in ‘shoot first and ask questions later’ mode but perhaps the selling is overdone — for now.”
There was a net inflow of 338 Bitcoins to Binance on Sunday, compared with a record net daily efflux of more than 40,000 on Dec. 13, according to data from CryptoQuant. Net outflows of Ether slowed to 1,183 tokens on Sunday versus a net exit of more than 278,000 last Tuesday.
Binance and some other digital-asset exchanges had engaged accounting firm Mazars Group to work on reports that were meant to show the companies have the needed reserves to cover a surge in withdrawals.
But Mazars last week said it was suspending work for crypto outfits because of signs that markets haven’t been reassured by “proof-of-reserves” reports published so far. The firm was also concerned about intense media scrutiny.
Zhao’s Defense
Binance said the company embraces additional transparency and is searching for a big accountancy firm that’s willing to work on such reports.
Chief Executive Officer Changpeng Zhao has been defending the exchange’s position. He said in a tweet Sunday that “we are still hiring,” linking back to a post from June saying that Binance was hiring for 2,000 open positions. Before that, he’d tweeted that “FUD is temporary.”
Fundstrat Global Advisors LLC’s head of digital-asset strategy Sean Farrell said in a note on Friday that it’s likely that Binance is solvent and has customer assets fully backed.
But he also said there’s “a non-zero chance” of Binance going “belly-up in the instance of a complete bank run.” He added that “to easily mitigate any risk of asset loss or seizure, one should remove all funds from the exchange.”
BNB was trading at about $247 as of 2:10 p.m. in Singapore on Monday. The token has shed 9% over the past month, a period when Bitcoin has been steady. BNB is up more than $1,600% over the past three years, compared with Bitcoin’s 133% gain.
For crypto market prices: CRYP; for top crypto news: TOP CRYPTO.
–With assistance from Sidhartha Shukla.
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