Binance, the world's largest cryptocurrency exchange, recently encountered an event that looked like a bank run which forced it to temporarily stop withdrawals allegedly due to technical problems. In a move to reassure the public, Binance noted that assets stored on its on, chain addresses had, in fact, gone up during the so, called bank run.
In a tweeting thread, Binance co, founder and CTO He Yi shared that the assets on the company's on, chain addresses grew during the event that looked like a bank run which goes against the narrative of a massive fund outflow. He Yi went on to say that the whole thing was basically a coordinated except a few from the community tried to make a coordinated withdrawal push but the moment people realized that it was a campaign, deposits started to outnumber withdrawals. Meanwhile, Binance also saw large, scale withdrawals as a helpful stress test for the industry, and He Yi emphasized the significance of having self, custody options for the users. Users need to be vigilant about their money transfers, he also warned. He Yi revealed that the episode window experienced net inflows thus negating the notion of a bank run.
A renewed discussion on the risks of using exchanges was triggered by the short suspension of withdrawals on social media where some users compared the situation to past exchange failures like FTX.
Denial of Bitcoin Dump Claims, Changpeng Zhao, Binance co, founder, vehemently denied the allegations that the exchange sold off $1 billion worth of Bitcoin to initiate the weekend's market crash. He pointed out that the funds were actually coming from users who were trading on the platform. Response of Binance,
Transparency Reports: To alleviate public concerns about the exchange risk, Binance has mainly relied on transparency reports for establishing counter, arguments. According to CoinMarketCap, the exchange is ranked as the number one in terms of reserves, having nearly $155.64 billion in total reserves.Customer Assurance, The purpose of He Yi's communication was to reassure customers that Binance is dedicated to offering a safe and trustworthy platform for trading and storing digital assets. NOTE:"Support this trade if you find it helpful! Your click will not only benefit you but also me. Thanks for your support!"
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