- Binance is facing renewed pressure amid conflicting reports of large-scale outflows.
- While some data suggests billions in withdrawals, other sources show net inflows.
- Binance has dismissed the concerns as coordinated FUD and launched a $400M compensation fund after a flash crash.
In a recent Altcoin Buzz video, host Maddie broke down the growing pressure on Binance, the world’s largest crypto exchange. With rising market uncertainty and reports of major withdrawals, the big question is whether Binance is facing a serious crisis or just going through a temporary rough patch.
Maddie pointed to a massive $40 billion market sell-off on October 10, which sparked widespread panic. He also addressed online rumors that Crypto.com had taken legal action against Binance but clarified that there’s no official confirmation of any such move.
Related: France Hits Binance, Coinhouse With Sweeping Crypto AML Checks Ahead of MiCA Deadline
Conflicting Data on Exchange Outflows
One major concern is the size of Binance’s recent outflows. CoinGlass reported over $21 billion in withdrawals in seven days, which raised fears of a “bank run”. However, data from DeFiLlama told a different story, showing $4.2 billion in deposits in 30 days instead. This led many to believe that the panic might be overblown.
Binance itself dismissed the negative reports as part of a coordinated FUD campaign to undermine trust in the platform.
Co-founder Yi He even claimed that influencers were offered $20,000 to spread false stories about Binance, though no hard evidence has surfaced.
Experts Say Reserve Drops Are Normal
Julio Moreno, a senior analyst at CryptoQuant, confirmed that Binance’s reserves dropped by $8 billion in one week. But he also said this isn’t unusual. The reserves had increased by $14 billion just weeks earlier. Maddie added that many analysts view the outflows as part of normal market cycles, not signs of a liquidity crisis.
Token Listing Dispute Reignites
Binance is also under fire over how it lists new tokens. Limitless Labs CEO C.J. Hetherington claimed that Binance demands tokens or payments in exchange for listings, raising questions about fairness.
Binance denied profiting from listings, but then deleted its statement and apologized for poor communication. Critics, especially developers, continue to push for more transparency in how Binance approves new tokens.
Flash Crash and Binance’s Compensation Fund
Binance’s unified account system has been blamed for contributing to the Oct. 10 crash. The system allowed traders to use assets such as USDE, WBETH, and BNB as collateral, with liquidation prices set by Binance’s own order book instead of external oracles. This structure reportedly amplified liquidation risks.
To address user losses, Binance created a $300 million compensation fund—later increased to $400 million. Some users, like “Crypto Tech King,” said they got partial compensation. Others claimed they received little or none.
Market Manipulation Claims and Investigations
Jeff Yan, founder of Hyperliquid, accused Binance and ex-CEO Changpeng Zhao of market manipulation and under-reporting liquidations. These accusations have not been proven, and no solid evidence has emerged to support them.
Despite the allegations, Maddie clarified that Binance’s position and deep liquidity make it difficult to destabilize entirely. However, he warned that continued FUD could erode trust in centralized exchanges.
Related: Binance Disputes $21.75B Outflow Reading; BTC Holds $111K As Method Math Draws Fire
Concluding his report, Maddie encouraged users to follow on-chain data and consider moving their crypto to non-custodial wallets. He said that while Binance appears strong for now, no exchange is completely safe from systemic risks.
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