2023-06-11 15:06:00
© Archyde.com Binance CEO explains misleading statements regarding massive outflows from the platform
Binance, the world’s largest cryptocurrency exchange, has been hit. It has recently come under intense scrutiny following lawsuits filed by the US Securities and Exchange Commission (SEC). While the trading platform faced significant interest due to reported outflows. Binance CEO Changpeng “CZ” Zhao took to Twitter to address the issue. Pointing out that the data provided was somewhat misleading.
CZ refutes reported outflows as inaccurate According to CZ, internal data for Binance reveals a net outflow of approximately $392 million over the past 24 hours. He noted that some third-party analysis firms determine outflows by measuring changes in assets under management (AUM) in US equivalent. Which includes the effect of lower prices. CZ stressed that this approach may not accurately represent the actual outflows and that it combines two different concepts.
Furthermore, the 46-year-old crypto mogul explained that while declining cryptocurrency prices are decreasing assets under management, the cryptocurrency has been declining. They should not be classified as outflows. While I argued that Binance’s public wallet addresses make it possible for anyone to track the movement of funds. CZ pointed out that some analysis firms only measure outflows without considering inflows. Which can lead to a skewed representation of the movements of the Binance assets.
The impact of market volatility on assets under management In addition to all this, CZ highlighted the impact of sharp price movements. Like the huge price drop that occurred in the cryptocurrency market on June 10th. It is highlighted in days like these. Arbitrage traders often transfer a large amount of funds between trading platforms. Which leads to much higher activity than normal days. This increased movement of money can create the illusion of larger outflows.
CZ recalled an earlier case in November when the Binance platform processed a net outflow of $7 billion in one day. He emphasized that these figures should be taken into account in the context of the overall market dynamics and the particular circumstances surrounding each trading day.
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