She is the latest in a list that will soon not be able to grow any longer: in the turmoil, the crypto exchange platform has suspended USDC withdrawals. According to her, it would be a temporary operation. That’s what all the others have said before them…
It’s starting to do a lot. On the day of the arrest of Sam Bankman-Fried, the ousted boss of FTX, its competitor Binance announced that it was suspending withdrawals from certain coins following a movement of panic among its customers. The scenario seems to be repeating itself once again and, despite the declarations of its CEO, the company’s days could well be numbered.
An audit, a panic, a suspension of withdrawals: the scenario repeats itself
It all started on December 7th. On that day, the audit firm Mazars published a report on the state of Binance’s finances which was intended to be reassuring, in particular on its ability to present solid guarantees in the event of massive withdrawals. The audit, ordered by the platform probably to stand out from FTX which had just exploded in mid-flight, however, did not have the desired effect.
Several personalities from the world of finance, including a former official of the SEC (Security and Exchange Commission, American financial policeman), have indeed widely questioned the conclusions of the audit firm, even speaking of ” red flags (red flags, or warning signs). These warnings were supplemented by an investigation by Reuters, which reports that US justice is set to prosecute Binance for money laundering and circumventing sanctions against Iran. It was enough for investors, who are starting to be used to bankruptcies in the sector, to rush to recover their cryptos on the platform. The equivalent of $1.6 billion has reportedly been withdrawn in the past 24 hours, prompting Binance to halt withdrawals from USDC, the stablecoin affixed to the US currency.
And now ?
Changpen Zao, the boss of Binance, wanted to reassure his customers: withdrawals should resume within a few hours. But we have the right to wonder: the bankruptcies of FTX, Terraform Labs or even Freeway have indeed all been there, and all have promised their users that the suspension of withdrawals would only be temporary. Today, Sam Bankman-Fried was arrested, and Do Kwon, the CEO of Terraform Labs targeted by an international arrest warrant, is on the run in Serbia. As for Binance customers, it might be wiser to consider that their investments on the exchange are lost and to already consider what’s next.
Either way, Changpen Zao is worried, and he has good reason to be. The manager also confided in certain collaborators during the collapse of FTX. He sensed, rightly, that this new bankruptcy would certainly eliminate a competitor, but above all would strengthen the surveillance of regulators and judicial authorities in the United States. Indeed, the investigation into the embezzlement of his company could soon be coupled with another instruction, this time directly against him. If withdrawals do not resume on schedule, he may need to start looking at the price of plane tickets to Serbia.
Sources: CNBC, Reuters, The echoes
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