Crypto News: Binance, the world’s largest cryptocurrency exchange, has recently been under severe scrutiny following lawsuits filed by the U.S. Securities and Exchange Commission (SEC). While the exchange has faced significant attention due to the reported outflows, Binance CEO Changpeng “CZ” Zhao took to Twitter to address the issue, stating that the data presented was slightly misleading.
According to CZ, Binance’s internal data reveals a net outflow of approximately $392 million within the last 24 hours. He pointed out that certain third-party analysis firms determine outflows by measuring changes in Asset Under Management (AUM) in USD equivalent, which includes the impact of crypto price drops. CZ emphasized that this approach may not accurately represent the actual outflows and that it combines two distinct concepts.
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Moreover, the 46-year-old crypto mogul clarified that while crypto price drops reduce AUM, they should not be classified as outflows. While arguing that the public wallet addresses of Binance make it possible for anyone to track the movement of funds, CZ noted that some analysis firms solely measure outflows without considering inflows — which can lead to a skewed representation of Binance’s asset movements.
In addition to all this, CZ shed light on the impact of sharp price movements, such as the significant price drop experienced in the crypto market on June 10. He highlighted that on such days, arbitrage traders often transfer a substantial amount of funds between exchanges, resulting in significantly higher activity than on normal days. This increased movement of funds can create the illusion of greater outflows.
CZ recalled a past instance in November when the Binance exchange processed a net outflow of $7 billion in a single day. He emphasized that these figures need to be considered in the context of the overall market dynamics and the specific circumstances surrounding each trading day.
As things currently stand, the price of BNB — Binance’s native cryptocurrency — gained by 0.83% in a matter of minutes upon the announcement, and is presently being traded at roughly $235.
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