Binance suffers $1bn outflow in one day as crypto jitters spread

Investors have pulled more than $1 billion from Binance as the world's largest cryptocurrency exchange battles a crisis of confidence in digital tokens and fears it is also being dragged into U.S. investigations.

Binance Chief Executive Changpeng Zhao said the exchange recorded $1.14 billion in net withdrawals on Tuesday as users continued to remove their assets from its marketplace.

Net withdrawals had exceeded $3.6 billion over seven days, according to an analysis by blockchain research group Nansen.

The outflows underscored the jitters that have gripped crypto markets since the collapse of FTX, one of the industry's largest companies, last month. FTX founder Sam Bankman-Fried was charged with fraud in the US on Tuesday.

Nansen said the rapid withdrawals were the largest since June, when the digital asset market was caught in an unprecedented market crash that saw popular tokens lose value.

Zhao downplayed the extent of these withdrawals, insisting that it was “business as usual” for us. "Some days we have net withdrawals; some days we have net deposits," Zhao said on Twitter.

Investors withdrew record amounts of Bitcoin from crypto exchanges last month amid concerns about the safety of their assets. Crypto exchanges like Binance keep customers’ assets safe and offer a trading venue.

Binance said it has more than $60 billion in assets, enough money to pay for withdrawals. However, the company's disclosures do not include its liabilities, making it difficult to determine its financial health. The exchange told the FT that all customer deposits were backed by relevant assets and that its “capital structure was debt-free”.

Concerns about Binance intensified this week following a report by Reuters on Monday that Binance is facing criminal investigations in the United States over its handling of U.S. money laundering and sanctions laws. Binance said it was not appropriate to comment on a US investigation.

"Regulators are conducting a comprehensive review of all crypto companies against many of the same issues. This emerging industry has grown rapidly and Binance has demonstrated its commitment to security and compliance," the company said. Earlier this week it said it had responded to more than 47,000 requests from law enforcement last year.

The exchange said on Tuesday it had temporarily suspended withdrawals of USDC, a crypto token equivalent to the value of the U.S. dollar, while it conducted a "token swap" with the USDC coin. It subsequently resumed withdrawals, while other so-called stablecoins that track the dollar were unaffected, it added.