Binance Token Recovers After Concerns Over Crypto Exchange Cause Losses

The digital currency associated with Binance Holdings Ltd., the world's largest crypto exchange, ended a long period of decline that was partially caused by worries about money leaving the platform.

Binance Coin (BNB) has seen a 4% increase in the past 48 hours, ending a seven-day period of losses that had been the longest since October. Bitcoin and the top 100 tokens have remained relatively stable over the weekend.

Binance's net withdrawals of $6 billion over the course of three days last week could be seen as a reflection of the sentiment towards the platform. This lack of confidence in the crypto market was likely due to the bankruptcy of FTX and the accusations of fraud against its founder, Sam Bankman-Fried.

A representative from Binance declined to make any remarks regarding the changes in the price of BNB. However, they did emphasize that by fulfilling recent withdrawals, the exchange was able to pass a stress test that should provide assurance that funds are safe.

Cici Lu, CEO of crypto consultancy Venn Link Partners, commented on the FUD (fear, uncertainty, and doubt) surrounding Binance last week. She noted that the market is in a "shoot first and ask questions later" state, but that the selling may be excessive at the moment.

On Sunday, Binance saw a net inflow of 338 Bitcoins, which was a stark contrast to the record net daily outflow of over 40,000 on December 13th, as reported by CryptoQuant. Additionally, the net outflow of Ether tokens was much slower, with only 1,183 tokens leaving the platform on Sunday, compared to the net exit of more than 278,000 tokens on the previous Tuesday.

Binance and other cryptocurrency exchanges have enlisted the services of accounting firm Mazars Group to create reports that demonstrate they have the necessary funds to accommodate a rise in withdrawals.

Mazars recently announced that it was halting its services for cryptocurrency companies due to the lack of confidence in the "proof-of-reserves" reports that have been released. Additionally, the firm was worried about the intense media attention that the industry has been receiving.

Binance has expressed their commitment to increased transparency and is actively seeking out a reputable accounting firm to assist in producing reports.

Changpeng Zhao, the Chief Executive Officer of Binance, has been defending the exchange's stance. On Sunday, he tweeted that they are still recruiting, referring to a post from June that mentioned they were looking to fill 2,000 positions. Additionally, he had previously tweeted that "FUD is temporary."

Sean Farrell, the head of digital-asset strategy at Fundstrat Global Advisors LLC, suggested in a Friday note that Binance is likely to be solvent and have its customers' assets fully backed.

CZ warned that there is a possibility of Binance going bankrupt if there is a bank run. He suggested that to avoid any potential loss of assets, users should take out their funds from the exchange.

At 2:10 p.m. on Monday in Singapore, BNB was trading at around $247. Over the past month, the token has dropped by 9%, while Bitcoin has remained stable. Over the past three years, BNB has seen an increase of over $1,600%, while Bitcoin has only gained 133%.