Latest crypto panic sees $1.9bn withdrawn in a day, sparking pleas to protect investors

Binance has downplayed the impact of wider scepticism about its stability, saying the company was shored up. “We always have more than enough funds to fulfil withdrawal requests,” a spokesperson said.

Whether the concern about Binance is due to Mr Bankman-Fried’s arrest is disputed by those in the industry. “I don’t think the arrest of SBF impacts Binance,” said crypto researcher Patrick McCorry. “It looks like the audit report they released has backfired and spooked investors, so people are now withdrawing as it’s safer to do that – and then re-deposit later – versus just keeping the funds on the platform.

Mr McCorry also believes that fears that Binance is on the brink of collapse are overkill. “The long-term issue is really just regulatory pressure they may come under, especially since entities like the SEC are quite hostile,” he said. That pressure is likely to have increased given the scrutiny that Mr Bankman-Fried has put the wider crypto industry under.

It now seems likely that regulators will continue to crack down on the crypto sector, worrying about the impact it has on ordinary people’s finances as they continue to plough their cash into an industry that is filled with business failures and bankruptcies. Regulators particularly fear the impact on poorer ethnic minorities. Asian, Black and Hispanic Americans are more likely than white adults to say they have invested in cryptocurrency, according to research

Source: Financial Digest (financialdigest.net)

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