Binance CEO Changpeng Zhao said the cryptocurrency exchange will ride out the current crypto winter.
In a Tuesday (Dec. 13) memo to Binance staff that was provided to PYMNTS, Zhao said he expects the next several months to be “bumpy” but that the exchange will emerge stronger.
“The fallout from the FTX explosion has brought with it a lot of extra scrutiny and tough questions,” Zhao wrote in the memo. “The good news is that, even though the news stories don’t always reflect it, we can answer the tough questions thrown at our business.”
Addressing news reports around withdrawals from the exchange, Zhao said that this is nothing unusual, as Binance often processes more than $1 billion a day in deposits or withdrawals. He added that user assets are backed 1:1 and the firm’s capital structure is debt free.
“We maintain hot wallet balances to ensure that we always have more than enough funds to fulfill withdrawal requests and we top up hot wallet balances accordingly,” Zhao wrote.
Turning to the exchanges temporary pause of withdrawals of USDC on Tuesday (Dec. 13), Zhao said this was caused by the company’s need to convert while many people were depositing BUSD or USDT to withdraw USDC.
“Our current conversion channels are clunky,” Zhao wrote. “We have to go through a bank in NY in USD, which is slow. We will improve this going forward.”
Noting that crypto is now at a “historic moment,” Zhao said Binance is built to survive any crypto winter, pointing to the quality of its product, user experience and trading environment.
“While we expect the next several months to be bumpy, we will get past this challenging period — and we’ll be stronger for having been through it,” Zhao wrote.
As PYMNTS reported Tuesday, Binance, Coinbase and other crypto exchanges have found themselves in the spotlight following the collapse of FTX.
For its part, Binance, the world’s largest cryptocurrency exchange, is now under pressure from authorities regarding its compliance with U.S. anti-money laundering (AML) laws, as relayed by PYMNTS Monday (Dec. 12).
In addition, the firm’s attempt to show a “proof-of-reserves” report in order to shore up confidence recently backfired, as even the auditors who worked on it have since distanced themselves from any broader implications being drawn from the narrow scope of their findings.
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