Binance's CEO claims that the outflows are impacted by "sharp price movement."
In light of a recent increase in cryptocurrency outflows from Binance, the crypto exchange's CEO, Changpeng Zhao, downplays the severity of the situation.
Noteworthy platforms for data analytics like DeFiLlama and Nansen have observed this uptick after news broke of the SEC's lawsuit against the company on June 6th.
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Nansen reveals a $2.36 billion net outflow from Binance over the past week, while an additional $123.7 million has exited Binance.US.
According to DeFiLlama data, the crypto exchange saw $3.45 billion in outflows. In similar observations, Glassnode data indicates a 5.7% decrease in the crypto exchange's balance, roughly $1 billion over the previous seven days.
Despite these alarming statistics, Changpeng Zhao, commonly known as "CZ," tweeted on June 10th, arguing that the interpretation of crypto exchange outflow data can often be skewed.
In his explanation, CZ claimed that "some 3rd party analytics measure Change in AUM (assets under management) in USD equivalent as outflows."
Zhao maintains that the actual outflow from Binance within a 24-hour window on June 9th was approximately $392 million. This figure seems less significant compared to the $7 billion one-day outflows recorded last November, coinciding with FTX's collapse.
Furthermore, CZ underscores that substantial inflows and outflows are commonplace in periods of price volatility. He explains:
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.
As centralized exchanges face legal challenges, decentralized finance (DeFi) volumes have seen a staggering surge of over 400%.
While Binance has undoubtedly seen a significant outflow of cryptocurrencies, CEO Changpeng Zhao assures that the situation might not be as alarming as it appears to be.
