- Binance admitted to restricting withdrawals and deposits, but later said it was an oversight.
- BNB’s value decreased amid speculation around a possible FTX-FTT repeat.
Concerns around the financial worthiness of Binance [BNB] have continued to grow, and the exchange has done little to allay fears. On 21 August, Binance, in a now-deleted post, communicated that withdrawals and deposits in Europe had been paused.
Read Binance Coin [BNB] Price Prediction 2023-2024
After a customer cried foul
According to the exchange, the reason for halting the payout was because of the payment processing problems it underwent with Single Euro Payment Area (SEPA) transfers.
For the unfamiliar, SEPA lets users in Europe partake in cashless cross-border payments via credit or debit transfers across European countries and a few non-EU nations.
But it was not until a customer brought up the issue that Binance came clean. Twitter user Nesh stated that he had tried withdrawing from the exchange for a few days. But all to no avail, the withdrawal did not reflect in his bank account.
I bought a large amount of EUR on Binance a few days ago. Now, I can't withdraw it to my bank account nor sell it again on Binance, because "my Paysafe account has been closed early". What is this scam? Don't hold my EUR hostage, wtf@cz_binance @binance @BinanceHelpDesk #Binance pic.twitter.com/DoXnTU4MZR
— Nesh (@Nesh61401966) August 20, 2023
However, Binance’s response that it was unsure when the matter would be solved was the major driver behind the Fear, Uncertainty, and Doubt (FUD) around the exchange. Its native coin Binance Coin [BNB] was also affected. In its statement, Binance said,
“We understand the inconvenience this has caused, and we’re actively working to resolve the issue as soon as possible. However, at the moment, we don’t have a specific time frame for the restoration of SEPA transfers.”
BNB feels the heat
Following the reply, BNB felt the heat of the market as its price tumbled. According to CoinMarketCap, BNB’s value decreased by 3.36% in the last 24 hours. Also, it could be on the edge of dropping below $200.
Besides the price decrease, Santiment showed that BNB’s funding rate had turned negative. Funding rates are periodic payments paid between long and short-positioned traders.
Source: Santiment
Meanwhile, Binance has come out to say that the now-deleted announcement was made in error. In a response via its customer support handle on Twitter, the exchange said withdrawals and deposits would function fine till 25 September. It also noted that it would find a suitable payment provider to continue the process.
The echoes of FTX linger
But the clarification did not stop the crypto community from panicking. According to crypto analyst Sunny Decree, Binance does not have the ability to support BNB without backing it with Bitcoin [BTC]. Hence, the regular issues with BNB’s price action.
He said that market participants need to be careful of the exchange. Moreover, he was of the opinion that the current Binance situation was similar to what happened with FTX before its collapse.
When the funding rate is positive, it means that traders are bullish on the price action. But in BNB’s case, the negative funding rate at 0.011% implies widespread bearishness around the coin.
To simplify the #Binance issue: Binance introduced its own token #BNB. Its utility is mainly within the Binance platform. The total market cap of BNB is roughly equivalent to 1.2 million #Bitcoin. But Binance doesn't hold 1.2M Bitcoin. If BNB's value drops, Binance might… pic.twitter.com/eqjw4qb6nR
— sunnydecree (@sunnydecree) August 21, 2023
Another person who commented on the matter was Adam Cochran. Cochran, who has never hidden his disdain for the way Binance runs its operations, accused the firm of trying to liquidate in small numbers.
According to him, this was done in order to limit the severe impact a large liquidation could have on the market. Cochran said,
“So far it looks like Binance is trying to liquidate this in really small chunks to stave off large liquidation, but people keep pushing BNB to test it further. Since its OTC and they claim to have already set aside the money on the books, why not just get it over with?”
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Whale tracking handle WhaleChart also reinforced Decree’s and Cochran’s position. According to WhaleChart, Binance had begun selling BTC to support the BNB price action.
BREAKING:
Binance is allegedly selling Bitcoin to support the price of their own token BNB
— Whale (@WhaleChart) August 22, 2023
Despite all of this, CEO Changpeng Zhao (CZ) had made no announcement as of press time—an uncharacteristic move from the Binance head.
