Binance Withdrawal Glitch Sparks FTX-Style Fears: Déjà Vu for Crypto Users?
For a tense few hours, the world's largest crypto exchange hit pause. Binance users found withdrawal buttons grayed out—a chilling echo of 2022's catastrophic collapse.
The Ghost in the Machine
No advance warning. No detailed explanation—just a system 'pause' that sent shivers through portfolios. It wasn't a hack or a liquidity crunch, the platform assured, but a 'technical issue.' Tell that to anyone who lived through the FTX debacle, where 'technical issues' were the opening act to a multi-billion dollar vanishing act.
Trust Is the Hardest Asset to Mine
Crypto's foundational promise is sovereignty—control your keys, control your coins. Centralized exchanges like Binance built empires on convenience, asking users to trade that promise for ease. Every glitch, every outage, is a stark reminder of that bargain. The market's memory is elephantine when it comes to lost funds.
Normalizing the Abnormal
The finance jab? Traditional banks have their own meltdowns, sure, but they don't typically brand 'brief withdrawal outages' as a standard feature. In crypto, we've somehow accepted that multi-trillion dollar platforms can just… stop working, with explanations arriving fashionably late to the panic party.
The outage passed. Funds remained safe. But the psychological damage? That lingers. Each event like this doesn't just test systems—it erodes the very trust the entire digital asset class is built upon. The industry can engineer flawless blockchains, but it's still writing buggy code for human confidence.
Binance withdrawal outage starts online barrage
According to posts circulating on X citing blockchain data, there were heavy outflows from Binance wallets late into Tuesday night. One shared message alleged billions of dollars in stablecoins like Tether’s USDT and top-cap cryptocurrencies, leaving exchange addresses in a suspicious manner.
The post also accused the Binance executives of wrongdoing, although this has not been proven, as the exchange has not reported any solvency issues. The exchange also did not reveal the specific technical problem, although some observers note that such issues are common in the crypto trade.
Bitcoin and ethereum have both witnessed over 23% price drops in the last three months, with the former sliding down to a price level last seen 10 months ago. A market slump may have prompted traders to swap their tokens for USDT and withdraw en masse, but a section of Crypto Twitter believes there is foul play, as in the case of the Sam Bankman-Fried-led FTX.
In November 2022, a report revealed weaknesses in Alameda Research’s balance sheet, a trading firm tied to Bankman-Fried. Alameda held large amounts of FTT, a token created by FTX that was purportedly intended to serve as its stock equivalent, similar to Binance’s BNB.
FTT had market value but limited liquidity under stress, so a price decline WOULD have definitely threatened Alameda’s financial position. After that report, Binance’s chief executive at the time, Changpeng Zhao, said his firm would liquidate its FTT holdings.
As concerns about the crypto market piled on the exchange and Alameda’s business, FTT’s price dropped sharply, forcing customers to withdraw funds from FTX. After billions of dollars exited the platform in a matter of days, FTX decided to halt withdrawals entirely.
Cryptopolitan later reported that the exchange faced an $8 billion shortfall, an event that left many investors scarred since. Any service disruption at a large exchange now is enough to fill social chatter with comments of fear, uncertainty, and doubt.
“’We are currently using your liquidity to meet our own margin calls. Please hold. In the Boardroom, we call this ‘Gating the Herd.’ Rest assured, the ‘fix’ will arrive precisely 15 minutes after the market bottom has been printed and the insiders have re-positioned. Not your keys, not your coins, not your exit,” said one X user mocking Binance’s announcement.
Crypto market volatility ignites suspicion
The Binance episode occurred during a market bloodbath that began over the weekend, when bitcoin slid below $76,000 for only the second time in over a year. According to CoinGlass data, $2.56 billion in liquidations occurred between Saturday and Sunday.
Zhao wrote a statement on X Monday rejecting what he called “pretty imaginative FUD.” He blasted claims that Binance sold large amounts of Bitcoin to trigger the drop, insisting wallet balances change when users withdraw, not through internal dumping.
The former Binance CEO also dismissed suggestions that he derailed a “supercycle” in crypto prices. He joked that if he had such influence, “he would use it differently.”
Other accusations sent Zhao’s way included market practices in the TRON ecosystem, in which he was accused of working with Tron DAO founder Justin Sun to manipulate the market. A woman claiming to be a former partner of Sun alleged that Tron and Binance collaborated and paid influencers to impact token prices.
“I am willing to fully cooperate with an SEC investigation and to submit all relevant WeChat chat records, as well as evidence provided to me by his employees, proving his market manipulation activities,” the woman’s statement read.
Join a premium crypto trading community free for 30 days - normally $100/mo.
