Binance’s native BNB token has fallen to its lowest level since July as concerns grow over withdrawals and FTX ties

More than a month after the FTX crash, investors are worried about the cryptocurrency exchange Binance is not fading away.

binance The native token, BNB, has fallen 15% in the past week, including a drop of more than 6% in the past 24 hours. BNB, first minted in 2017, is The fifth largest cryptocurrency in the world, with a market capitalization of about $39 billion, according to CoinMarketCap. It’s just behind bitcoinAnd the raisedRope and US dollar coin.

The latest looming issue regarding Binance is the FTX bankruptcy proceedings. Binance was the first outside investor in FTX. When exiting its position in the company last year, Binance received payments equivalent to approximately $2.1 billion.

In an interview with CNBC’s “Squawk Box” on Thursday, Binance CEO Changpeng Zhao dismissed concerns that his company might recover the funds while FTX works its way through bankruptcy court and the trustees look to recover any fraudulent transfers FTX made to outside companies or investors. .

“We’re fine financially,” Zhao said after CNBC’s Becky Kwik asked him if the company would be able to handle a $2.1 billion order.

Cryptocurrency investors have become suspicious of CEOs’ comments about the financial health of their companies. FTX founder and former CEO Sam Bankman-Fried said on Twitter that his company had good assets, even as executives knew it was in the midst of a liquidity crisis that eventually forced the exchange into bankruptcy. Bankman-Fried was arrested this week in the Bahamas and charged with fraud and money laundering by US prosecutors.

Withdrawal demands are another area of ​​concern. Zhao said about $1.14 billion in net withdrawals occurred on Tuesday, but he tweeted that this was not “the highest withdrawals we’ve processed, not even the highest.” [five]On Wednesday, he said the situation had “stabilised”. Blockchain analytics firm Nansen said Tuesday’s withdrawal figure reached $3 billion.

“We passed this extreme stress test because we operate a very simple business model — holding assets in custody and generating revenue from transaction fees,” a Binance spokesperson told CNBC in a statement. The spokesperson did not provide an immediate response to a question about the BNB share price drop.

Binance and FTX was closely related. Zhao publicly announced last month that his company was liquidating its position in FTX, FTX’s native currency, amid concerns about the solvency of both FTX and its sister trading company, Alameda Research.

Then FTX faced an immediate surge in withdrawal requests, and Binance stepped in with a non-binding agreement to take over the company as part of the bailout. A day later, Binance backed out of the deal, stating that FTX’s issues were “beyond our control or ability to help.”

Like all major crypto projects and companies, Binance has developed its own currency. On its website, the company says that people can “pay for goods and services with BNB, settle transaction fees on the Binance Smart Chain, participate in exclusive token sales, and more.” The site says that areas where BNB can be used include payment, travel, and entertainment.

There is a circulating supply of about 160 million BNB out of a total maximum supply of 200 million, according to CoinMarketCap. Bloomberg reported in June that the SEC was investigating whether the 2017 token sale represented a security offered that should have been registered with regulators.

— CNBC’s Mackenzie Cigalos contributed to this report.

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