- Users report having trouble withdrawing assets from Binance.
- The reports have stoked speculations about the crypto exchange’s solvency.
- Binance’s PoR report fails to inspire confidence.
In the eye of a legal and regulatory storm, Binance‘s business is attracting significant scrutiny from regulators and crypto users alike. Concerns over the firm’s solvency have reached a fever pitch, further fueled by the recent rapid flight of executives.
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While Binance CEO Changpeng “CZ” Zhao has attempted to dismiss these concerns by asserting that the firm has “no liquidity issues” in statements on September 7, emerging rumors of withdrawal issues at the exchange are shaking investor confidence.
Binance Withdrawal Rumors Emerge
On Sunday, September 17, prominent crypto community member “Napgone” shared a screenshot of a Telegram conversation that suggested customers with large crypto holdings were having trouble withdrawing assets from Binance since Wednesday, September 13.
Minutes later, “Dom,” a claimed Solidity developer, took to Twitter to disclose that Binance was not letting them withdraw their crypto holdings, seemingly corroborating the information shared by Napgone. According to the user, the exchange had also failed to respond to their support request.
These tweets have further fueled insolvency speculations surrounding Binance. Responding to them, “Parrot Capital,” who has often asserted that Binance will likely collapse like FTX, urged customers to exit the platform before it was too late. Similarly, Cinneamhain Ventures Partner Adam Cochran contended that the cracks at Binance were beginning to show.
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Nonetheless, it remains unclear if reported withdrawal issues are signs of a more significant problem or isolated incidents, as some other users claimed to have successfully processed withdrawals on the platform.
Binance has yet to respond to a request for comment at the time of writing.
Is Binance Solvent?
Binance recently released its tenth Proof-of-Reserves (PoR) report, claiming to hold excess reserves to cover customer deposits for at least 31 of over 350 supported assets on the platform. These holdings included 618.12k BTC, 4.09 million ETH, and 34.5 million BNB.
However, as has been highlighted by several seasoned market observers, these reports provide no way of gauging the exchange’s solvency without liability disclosures. This disclosure provides an extra layer of information, showing how much debt the firm has instead of just crypto holdings versus customer deposits, as is the current practice.
On the Flipside
- The scale of reported withdrawal issues remains unknown.
- Binance’s Zhao maintains that the firm has zero liquidity concerns.
Why This Matters
Withdrawal issues have typically marked the collapse of troubled crypto firms over the past year. Amidst growing concerns over its business in the face of regulatory and legal troubles, withdrawal issues at Binance would be a red flag for many investors.
Read this to learn more about the rapid flight of Binance executives:
Binance Executive Exodus Continues as Russia Chiefs Bow Out
Paxos’ recovery of its overpaid Bitcoin fee has sparked centralization debates. Find out more:
F2pool Returns Paxos’ Overpaid $500K BTC Fee, Defying Poll
