Data analytics platforms have reported billions of dollars in outflows from Binance over the last week, but this can be misinterpreted, argues Changpeng Zhao.
While data suggests that crypto assets have been flowing out of centralized exchanges at an accelerated pace over the last week, Binance CEO Changpeng Zhao argues it may not be as bad as it appears.
Leading analytics platforms such as Nansen and DefiLlama have all measured increased exchange outflows from Binance over the past seven days after news of the Securities and Exchange Commission’s lawsuit against the firm hit the airwaves.
According to Nansen, there has been a net outflow of $2.36 billion from Binance over the past seven days, along with $123.7 million flowing out of Binance.US.
DefiLlama reported an even larger figure of $3.35 billion in outflows from Binance, while Glassnode data shows the exchange’s BTC balance having declined by 5.7% or around $1 billion over the past seven days.
However, in a June 10 Twitter post, CZ argued that some exchange outflow data can be skewed as some third-party analytics measure change in assets under management as “outflow,” which would include times when crypto prices decline.
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
CZ instead claimed the firm’s outflow over the past 24 hours on June 9 was around $392 million, which pales in comparison to the $7 billion in one-day outflow that was recorded last year in November, around the time of FTX’s collapse.
CZ continued to explain that large inflows and outflows are perfectly normal during times of 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.”
Related: Binance says it’s ‘different’ from other exchanges amid SEC lawsuit
Since the SEC’s lawsuits against Binance and Coinbase on June 5 and 6, the total crypto market capitalization has declined by 7%, or more than $80 billion, according to CoinGecko.
On June 9, Cointelegraph reported that decentralized finance volumes surged more than 400% following the twin lawsuits targeting thecentralized exchanges.
Magazine: Binance, Coinbase head to court, and the SEC labels 67 crypto-securities: Hodler’s Digest, June 4-10
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