Now a Run on Binance? 

Billions of dollars worth of stablecoins are being withdrawn from top crypto exchange Binance, according to blockchain analytics firm Glassnode .

Glassnode indicated that Binance has witnessed $3.2 billion in combined outflows of USDT Tether, USDC USD Coin, BUSD Binance USD and Dai  over the last 30 days. 

Netflows of all exchanges are still somewhat negative as users withdraw funds to self-custody, however not nearly as dramatic as the mid-November crash due to FTX:

Again, the biggest concern with netflows is when there is a huge spike INBOUND to exchanges which generally signals that investors are transferring coins to centralized exchanges to sell them. 

When asked for an opinion on the matter, Binance said that The exchange dealt with net outflows of around $6 billion over 72 hours last week “without breaking stride” because its finances are solid and “we take our responsibility as a custodian seriously.” After the collapse of rival exchange FTX last month, Binance’s founder “CZ” promised his company would “lead by example” in embracing transparency.

The problem with this is that Binance doesn’t disclose basic financial information such as revenue, profit and cash reserves. The company has its own crypto coin (BNB), but doesn’t reveal what role it plays on its balance sheet. It lends customers money against their crypto assets and lets them trade on margin, with borrowed funds. But it doesn’t detail how big those bets are, how exposed Binance is to that risk, or the full extent of its reserves to finance withdrawals.

Binance is not required to publish detailed financial statements because it is not a public company, unlike U.S. rival Coinbase, which is listed on the Nasdaq. (COIN) Nor has Binance raised outside capital since 2018, industry data show, which means it hasn’t had to share financial information with external investors since then.

Binance must survive this FUD attack or we’ll see the next leg down in crypto prices. At the same time, Binance must lead by transparency, not just words.