In the wake of recent reports pointing to significant outflows from Binance, CEO Changpeng Zhao, commonly known as CZ, has responded, suggesting that the situation may not be as alarming as it appears.
Data from various analytics platforms has indicated a surge in crypto assets flowing out of Binance following the news of the SEC lawsuit against the exchange.
However, CZ argues that the interpretation of these outflow figures needs to be carefully examined.
Leading analytics platforms, including Nansen, DeFiLlama, and Glassnode, have presented different figures for the outflows from Binance.
Nansen reports a net outflow of $2.36 billion from Binance and $123.7 million from Binance.US over the past seven days.
DeFiLlama, on the other hand, indicates a larger outflow of $3.35 billion, while Glassnode data shows a decline of around $1 billion in BTC balance on the exchange.
CZ took to Twitter to share his perspective on the outflow data, cautioning that some third-party analytics measure changes in assets under management as “outflows,” which may include instances when crypto prices decline.
He pointed out that Binance’s outflow over the past 24 hours was around $392 million, significantly lower than the $7 billion outflow recorded in November 2020 during FTX’s collapse.
CZ emphasized that large inflows and outflows are not unusual during times of volatility in the crypto market. He highlighted that arbitrage traders, especially on days with sharp price movements, tend to move substantial funds between exchanges, leading to increased outflow figures. Therefore, he urged caution in interpreting the outflow data without considering the broader context.
The SEC’s actions against Coinbase and Binance have had a notable impact on the crypto market, with a decline of 7% in market capitalization, equivalent to over $80 billion, since June 6, according to CoinGecko.