Changpeng Zhao believes that the recently shared data highlighting the outflow of crypto assets from centralized exchanges are not as bad as it sounds. Some leading analytics platforms, notably Nansen and CryptoLlama, have measured rapid outflows from Binance over the previous week since the SEC filed a suit against Binance. Nansen highlighted that there has been a total outflow of $2.36 billion from Binance, coupled with approximately $123.7 million flowing out of Binance.US.
DeFiLlama managed to raise eyebrows by reporting an even larger sum of almost $3.35 billion in outflows from Binance. However, based on the data shared by Glassnode, it has come to light that the total balance of the exchange had declined by 5.7%, or approximately $1 billion since last week. Changpeng Zhao mentioned how the outflow data might be misinterpreted as several third-party analytics measure change in assets under the management as outflow.
According to our data, last 24hrs, @Binance net outflow is about $392m.
Our wallet addresses are public. Some 3rd party analytics measure Change in AUM (asset under management) in USD equivalent as outflow. This would include crypto price drops (which decrease AUM) as "outflow".…
— CZ 🔶 Binance (@cz_binance) June 10, 2023
Binance CEO Gives Reassuring Statements
Zhao clarified that the total outflows on June 9 accounted for almost $392 million, which is merely a fraction of last year’s outflow of $7 billion. The massive, one-day outflow was recorded not too long after the collapse of FTX. At the same time, Zhao continued to explain that both inflows and outflows display the tendency to be perfectly normal during times of increased volatility.
“Some even only measure outflow, not inflows. On a sharp price movement day like today, many arbitrage traders move a lot of funds between exchanges, usually exponentially more than on normal days.”
Apart from the concerns surrounding the possibly misinterpreted outflow data, the exchange highlighted how it is different from other crypto exchanges. All of Binance’s wallet addresses are fully transparent, it has not siphoned customers’ funds, and it does not have collateralized borrowing.
The crypto exchange mentioned how it has never made any large donations to political figures or was a part of any type of large sponsorship. However, it did not explicitly mention the names of the exchanges it tried differentiating itself from, but analyzing the details shared points fingers towards the troubled FTX exchange.
Since the SEC launched its attacks on both Binance and Coinbase, the total market capitalization of crypto has declined by almost 7%, or more than $80 billion. Similarly, it was also reported that the DeFi volumes also surged by 400% following the lawsuits on the two exchanges.